MTF updates: Delivery conversion, higher limits, and GTT support

The Margin Trading Facility (MTF) is a service that allows you to buy shares by paying only a portion of the total cost. Zerodha funds the remaining amount, and interest is charged on it.

Since launching Margin Trading Facility (MTF) last year, we have been working on making several enhancements to improve your MTF experience. We have made four key improvements:

1. MTF to delivery conversion – You can now convert your MTF positions into delivery positions with just a few clicks
2. Increased MTF limits – Trade with up to ₹5 crore per stock and ₹25 crore per account
3. More MTF-eligible stocks – Use MTF on over 1,300 stocks with up to 5X leverage
4. GTT & AMO for MTF – Place MTF orders for GTT and AMO order types.

Here is a detailed look at each improvement:

MTF to delivery conversion

You can now easily convert your MTF positions to delivery holdings through Console.

The process is straightforward: you need sufficient funds in your account to cover the conversion. If you do not have enough money for all your shares, the system will automatically convert as many shares as your available funds allow.

For example, if you bought 10 shares using MTF but only have enough money to fully pay for 5 of them, the system will convert those 5 shares to delivery based on your available funds. The other 5 will remain as MTF holdings, where you are still borrowing some of the money from Zerodha.

How to convert MTF to delivery on Kite app

1. Tap on User ID
2. Tap Portfolio
3. Tap the options button, then Portfolio again
4. Tap MTF holdings to see all your MTF positions
5. Tap the stock you want to convert, then tap “Convert to holdings”
6. Enter how many shares you want to convert and tap Confirm

If you place the conversion request before 4 PM, it will be processed the same day. If it is after 4 PM, the request will be processed the next working day. If you want to cancel your conversion request, just tap the stock in your MTF holdings and select Cancel conversion request.

Increased MTF limits

Zerodha has increased MTF funding limits:

• Per stock: Up to ₹5 crore
• Per account: Up to ₹25 crore

The margin requirements and interest rates remain unchanged.

More MTF-eligible stocks

The MTF stock list now includes over 1,300 different stocks, allowing you to spread your investments across many different companies and sectors.

You can get up to 5X leverage on eligible stocks. The amount of leverage depends on the specific stock – some stocks offer 2X leverage, while others provide up to 5X leverage.

To see which stocks are available for MTF and how much leverage each one offers, check the Approved list of securities for MTF.

GTT & AMO for MTF

Previously, you had to monitor the market constantly to take fresh MTF trades or exit your positions. Now, you can place GTT orders at specific prices to either take fresh positions or set stop-loss or target prices for existing positions.

Example scenario

Let us say you have ₹2,000 in your account:

• There is a stock you want to buy that costs ₹1,000 right now, and it is eligible for 3X margin with MTF
• You think it might drop a bit, so you set a GTT to buy when it hits ₹950
• With your ₹2,000 and the 3X margin, you can actually buy 6 shares when the price drops
• When the price hits ₹950, your order executes, getting you 6 shares (which cost 6 × ₹950 = ₹5,700 total)
• But you only pay ₹1,880 out of pocket (that is ₹5,700 ÷ 3), and Zerodha covers the other ₹3,820 for you

How to place a GTT order for MTF

1. Search for a stock and add it to your market watch
2. Click Options and then Create GTT
3. Choose whether you want to buy or sell, and what type of trigger you want
4. Make sure to click MTF
5. Enter the trigger price, how many shares you want, and your order price
6. Click Place and you are all set

You can also set up GTT orders from the order section by clicking GTT and then New GTT. For setting stop-losses and targets, just click Stop-loss or Target in the order window.

There is a feature called GTT OCO that lets you set both a stop-loss and a target at the same time.

If you place your MTF order after the markets close, it will automatically be converted to an After Market Order (AMO) and executed when the market opens the next day.

FAQs on Margin Trading Facility (MTF)

What is MTF?

Margin Trading Facility (MTF) is a service that enables you to purchase shares by paying only a portion of the total cost. The remaining amount is funded by Zerodha, and interest is charged on this amount.

What are the charges for using MTF?

The charges associated with MTF are as follows:

• Interest: 0.04% per day(₹40 per lakh) on the funded amount. The interest is applied from T+1 day until the stocks are sold.
• Brokerage: 0.3% or ₹20, whichever is lower per executed MTF order.

Learn more about MTF.

If you have questions about any of these MTF features, please post them in the comments below.