MTF Meaning in Stock Trading — A Simple Explanation

MTF Meaning in Stock Trading — A Simple Explanation

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MTF stands for Margin Trading Facility — a service offered by stockbrokers that allows investors to buy stocks by partly funding the purchase through borrowed money. In short, it lets you leverage your capital to take larger positions in the stock market.

Here’s how it works:
Let’s say you have ₹50,000. With MTF (and a broker offering 4x leverage), you can buy stocks worth ₹2,00,000 — your ₹50,000 is the margin, and the broker lends the remaining ₹1,50,000.

Why Use MTF?

• Increased buying power with limited capital

• Opportunity to magnify returns when stock prices rise

• Diversification by spreading investments across more stocks

Caution!

While MTF can boost profits, it also increases risks. Losses get magnified too — so proper risk management is key.

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