Explained: What are the advantages of marginal trading facility or MTF

Margin Trading Facility is an exchange approved product. It’s a safe and secure product that lets investors purchase more stocks with the limited capital. It involves borrowing money from a brokerage to purchase stocks and repaying the capital with interest later. This method is often referred to as leverage trading, amplifies returns but carries risks associated with market fluctuations.

Increased Purchasing Power: Margin Trading Facility enables traders to increase their purchasing power. It addresses the challenge of insufficient capital by allowing investors to take larger positions with only a fraction of the trade value paid upfront. By allowing investors to borrow funds to purchase securities, opens up opportunities to engage in bigger trades than otherwise possible with their available cash alone.