Have you ever missed a good trading opportunity just because you were low on funds at that moment? What if you could leverage 4x of your buying power and seal that trading opportunity in your favour? Yes, it is possible with Margin Trading Facility(MTF). Let us find out what Margin Trading Facility is and how it works in favour of an investor.
What is Margin Trading Facility (MTF)?
Margin Trading Facility allows investors to buy a stock by paying just a fraction of the total transaction value. The balance amount is funded by the broker (such as Angel One). You can increase your buying power up to 4x via MTF.
For instance,
Your Account Balance = ₹ 25,000
MTF gives you up to 4x buying power = ₹ 1,00,000 (25,000 x 4)
Thus, your enhanced Buying Capacity is now = ₹ 1,25,000
Meaning, you can still trade up to ₹ 1,25,000 even when you only have ₹ 25,000 in your account. How awesome is that?
However, you need to ensure that you have the required margin in your account before getting MTF.
So, what is the margin required?
Margin required is the amount you need to pay initially to buy stocks under margin products. Margin amount can be paid either in the form of Cash and/or Non-Cash Collateral.
Isn't it simple? So, what's stopping you from availing MTF with Angel One?