What are the risks of using MTF?

The core risk is leverage itself: since you’re funding only part of the position with your own money, a price decline hits your actual capital much harder in percentage terms than it would for a fully-paid position of the same rupee value. Daily interest accrues on the funded portion for as long as the position stays open, which means even a stock that’s flat or only modestly up can end up being a net loss once interest costs are subtracted. If the stock falls enough that your collateral value drops below the required maintenance margin, you’ll face a margin call, and if you can’t add funds in time, the broker can forcibly sell the position, often at a price and timing you wouldn’t have chosen yourself. MTF is also only available on SEBI-approved eligible stocks, and a stock’s eligibility or margin requirement can itself change over time based on volatility, meaning the terms of an existing MTF position can shift even without you doing anything. You treat MTF as a tool for a specific, time-bound conviction on a stock, not a default way to size up every position, given how quickly leverage and interest can turn a modest price decline into a significant capital loss.