What is Margin Trading Funding (MTF) ?

Margin Trading Funding (MTF) is a facility that allows you to capitalise on investment opportunities that may otherwise not be possible due to a shortage of funds. By paying for a part of your order value in the form of a margin, the remaining amount will be funded by Geojit. This margin can be brought as cash and/or pledged securities and interest charges are levied on the broker-funded amount.

Initial Margin Requirement:

As per SEBI regulations, clients are required to maintain a minimum initial margin, generally around 25% of the total trade value. This margin may be higher depending on stock-specific risk parameters such as Value at Risk (VaR) and Extreme Loss Margin (ELM).

Cash as Margin:

When margin is provided in cash, the broker funds the balance portion of the trade value after accounting for the client’s margin contribution. For example, if a client provides a 30% margin, the remaining 70% is funded by the broker.

Stock as Collateral:

When existing stock holdings are used as collateral, their value is considered after applying a prescribed haircut. The haircut acts as a risk buffer—for instance, shares valued at ₹1,00,000 may be assigned a collateral value of ₹80,000 after a 20% haircut. The broker then extends funding based on this reduced collateral value.

For example, 
          Mr Rohan has Rs. 25,000 in his trading account. He wants to buy 200 shares of Wipro at Rs. 500 per share (Rs. 1,00,000) as he expects its price to go up over the next month. Though he does not have sufficient funds for the trade, he can take advantage of the MTF facility provided by Geojit. 

Using the MTF facility, he can purchase the desired shares with Rs. 25,000 as margins. The balance of Rs. 75,000 will be funded by Geojit, for which interest charges are applicable.

In other words, the MTF facility enhances your buying power and investment capacity by allowing you to buy shares by paying for only a part of the trade value.

With margin requirements starting as low as 27%, and no time limitations on repayment, this facility provides you with access to funds to take advantage of market movements. 

* MTF margins can be cash and/or pledge margins.

* To avail of MTF, you will first have to activate the facility in your account.  Check eligibility.

* MTF is available only for Group 1 shares of NSE and those published by Geojit from time to time.

* Margin requirements vary scripwise and are subject to periodic changes.

* NRIs will not be able to activate MTF | Notifications (geojit.com)
ail of this facility.

Updated Circular

Still need help? Create Ticket