By using Margin Trading Facility, you can invest in hand-picked stocks without having to make a full upfront payment. Further, it allows you to hold stocks for an indefinite period of time and offers up to 4X leverage.
You can take advantage of the following benefits with Margin Trading:
Investors invest in MTF to leverage their holdings in securities that are not derivatives. Currently, you can leverage F&O stocks using futures and create margin trading positions.
Furthermore, margin trading accounts can only be opened by authorised brokers, such as BlinkX. In accordance with SEBI regulations, traders with a margin account & initial margin can do margin trading.
You can start trading with margin and enhance your trade in just a few taps once you know the terms and conditions of margin trading.
Avail competitive interest rates depending on your ticket size
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Margin Trading Funding is offered by the Broker to its customers to buy stocks with a minimum required margin (remaining amount will be funded by JM Financial Services Limited) and hold the stocks for 1 year by maintaining the required margin. Example: If a client wants to buy Reliance Industries shares worth Rs. 1,00,000 and the prescribed minimum margin (%) for Reliance is 25% then the margin amount to be paid by client would be around Rs.25000. The remaining amount of Rs.75000 would be funded by JM Financial Services Limited. A client can carry this funded position for 1 year. In case he wishes to take the delivery, then he just needs to repay the funded portion. Interest would be charged on the funded amount/Debit amount.
A client can carry delivery position for 1 year, by paying only a small percentage of the securities value known as margin amount, instead of the entire value of securities. Example: A client having a margin of Rs.25000 can buy stocks worth Rs. 25000 under normal circumstances (CNC product). By availing this MTF facility, the client can now take larger exposure with the same limit of Rs. 25000. As mentioned in the example, the client can buy Rs.1,00,000 worth of Reliance Industries shares by bringing a margin of Rs.25000. He can also carry this position for 1 year.
Group I securities as specified by the SEBI would be eligible for MTF trading, subject to the restrictions by the RMS team. JMFSL has its own approved list of stocks out of the Group I stocks, identified by it based on various risk parameters.
No. You only need to activate MTF once, and the process is simple and quick.
Depending upon your trade you can up to 50% of the margin on your trade.
You do not have to repay the loan amount directly. Stocks purchased with MTF appear under the Positions tab (not Holdings). All you have to do is exit your 'positions' within 365 days in order to return the amount.
0.053% is the standard interest rate charged on borrowed amounts.
As long as you maintain the required margin in your account, you can hold your positions under MTF.