What is Margin Trading Facility or MTF?

Margin Trading Facility, or MTF, lets you buy shares for delivery by paying only a portion of the total value upfront, with the broker funding the remaining amount as a loan against the shares themselves as collateral, and you pay interest on that borrowed amount for as long as the position stays open. It’s specifically for equity delivery positions, not intraday or F&O, and it’s regulated under SEBI’s margin trading norms, which specify which stocks are eligible for MTF (not every listed stock qualifies) and the minimum margin percentage you need to put up. MTF effectively lets you take a larger position than your available cash alone would allow, which amplifies both potential gains and potential losses relative to your own capital, plus the interest cost adds up the longer the position stays open. You check the specific interest rate, eligible stock list, and minimum margin requirement your broker applies before using MTF, since these details vary by broker within SEBI’s overall framework.