Benefits
MTF allows for larger trades, enabling you to capitalize on investment opportunities and potentially increase returns with a smaller initial investment.
With increased buying power, you can diversify your investments across a broader range of assets, which can help manage risk and improve portfolio performance
Leverage can amplify gains, as the returns are based on the total investment amount, including borrowed funds
MTF offers flexibility in trading strategies, allowing you to adjust positions based on market conditions and personal investment goals
By using borrowed funds, you can free up your own capital for other investment opportunities or purposes
The company gives you perpetual help till all your questions regarding trading are cleared
Compelling reasons that set us apart as your preferred stock broker.
How to open your account in 3 simple steps
Visit our website and fill out the quick and easy registration form with your basic details.
Complete the KYC process online by uploading your documents and verifying your identity.
Once your account is verified, you can fund it and start trading immediately on our platform
Margin Trading Facility (MTF) allows investors to borrow funds to purchase securities, using their existing investments as collateral. By leveraging MTF, you can increase your purchasing power and potentially enhance your returns, as you invest more than your own capital. This facility enables access to a broader range of investment opportunities and can amplify gains when markets perform well. However, it also involves higher risk, as losses can be magnified if investments decline in value. MTF provides a strategic way to potentially boost returns while managing liquidity and capital efficiency in your investment strategy.
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Margin Trading Facility (MTF) is a service that allows you to borrow funds from your broker to purchase additional securities beyond what your cash balance would typically allow. This leverage enables you to take larger positions in the market with a relatively smaller amount of capital.
When you use MTF, Trade Baazar provides you with additional funds to buy securities. In return, the securities you purchase, along with your existing holdings, act as collateral for the borrowed funds. You are required to maintain a minimum margin, and any shortfall must be covered by adding funds or selling securities.
Increased Purchasing Power: MTF allows you to buy more securities than you could with just your available cash.
Potential for Higher Returns: By leveraging your investments, you have the potential to earn higher returns if the market moves in your favor.
Flexible Funding: MTF provides you with the flexibility to capitalize on market opportunities without waiting to accumulate sufficient cash.
Leverage Risk: While MTF can amplify gains, it can also magnify losses. If the market moves against you, you may incur significant losses that exceed your initial investment.
Margin Calls: If the value of your collateral falls below the required margin, you will need to deposit additional funds or liquidate your securities to meet the margin call.
Interest Costs: Borrowing funds through MTF incurs interest costs, which can eat into your profits if not carefully managed
To qualify for MTF, you need to have an active trading account with Trade Baazar, meet the eligibility criteria set by the broker, and maintain the required margin in your account. The eligibility criteria may include factors such as your trading experience, financial stability, and risk profile.
The interest rate for MTF varies based on market conditions and Trade Baazar’s policies. The rate is typically charged on a daily basis and applied to the outstanding balance of borrowed funds. It is important to understand the interest rate and its impact on your returns.
A margin call occurs when the value of your collateral falls below the minimum margin requirement. In such cases, Trade Baazar will require you to deposit additional funds or sell some of your securities to restore the margin to the required level. Failing to meet a margin call can result in the forced sale of your securities.
MTF is available for a wide range of securities, including equities, ETFs, and certain bonds. However, not all securities are eligible for MTF. The eligibility of a security for MTF depends on factors such as liquidity, market capitalization, and Trade Baazar’s internal policies.
You can repay the borrowed funds by selling some of your securities, transferring funds into your trading account, or using dividends or other income generated by your investments. The outstanding balance is reduced, and the interest charged is based on the remaining borrowed amount.
MTF typically does not have a fixed repayment schedule, but it is subject to periodic reviews. As long as you maintain the required margin and pay the interest, you can continue using the facility. However, it is advisable to periodically assess your financial situation and repay the loan to minimize interest costs.
If you are unable to meet a margin call, Trade Baazar has the right to liquidate your securities to cover the shortfall. This process is known as forced liquidation and can result in losses, especially if the market is moving against you
Trade Baazar provides an online platform where you can monitor your MTF account, including your margin balance, outstanding loan amount, interest charges, and the status of any margin calls. Regular monitoring is crucial to managing your risk effectively.
Profits and losses from MTF transactions are subject to capital gains tax, similar to regular trading activities. The interest paid on borrowed funds is typically not tax-deductible. It is advisable to consult with a tax professional to understand the specific tax implications related to your MTF activities.
Trade Baazar employs robust security measures, including encryption, secure login procedures, and regular monitoring, to protect your MTF account from unauthorized access and fraud. Your investments and personal information are safeguarded at all times.
To get started with MTF, contact Trade Baazar’s customer service team or visit our website to learn more about the application process. We will guide you through the steps and provide the necessary resources to help you make the most of this facility.
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