What are MTF Stocks?

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mtf stocks are the shares that can be bought using the Margin Trading Facility (MTF) offered by brokers. Under MTF, investors can purchase stocks by paying only a part of the total value upfront—usually 20-25%—while the broker funds the remaining amount.

Key Features of MTF Stocks

Leverage: Enables investors to take larger positions with limited capital.

Short-term Gains: Ideal for short- to medium-term trading strategies.

Interest Charges: Brokers charge interest on the borrowed amount.

SEBI-Approved List: Only SEBI-approved stocks are allowed for MTF trading, often based on liquidity and market capitalization.

Popular MTF-Eligible Stocks

While the exact list may vary by broker, MTF stocks typically include:

Large-cap stocks like Reliance Industries, TCS, HDFC Bank

Highly liquid mid-cap stocks

Stocks from Nifty 50 or Sensex

Things to Keep in Mind

Interest Cost: Holding positions for long durations may reduce profitability.

Margin Call Risk: If stock prices fall, you may need to add more funds.

Broker Policies: Different brokers offer different leverage ratios and approved stock lists.

Conclusion

MTF stocks are a great way to enhance buying power in the stock market. However, traders must use them wisely by understanding the risks, interest costs, and margin requirements. Always check the broker’s MTF stock list before initiating a trade.

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WHAT ARE MTF STOCKS?

What are MTF Stocks?