mtf stocks refer to stocks that are eligible for trading under the Margin Trading Facility (MTF) offered by brokers. This facility allows investors to buy stocks by paying only a portion of the total value upfront. The remaining amount is funded by the broker, essentially providing leverage.

How MTF Works

Under MTF, an investor can:

• Buy shares by paying a margin (typically 20-50%).

• Hold the stocks in their demat account while the broker funds the rest.

• Pay interest on the borrowed amount until the position is squared off or the margin is topped up.

Example:

You get exposure worth ₹1,00,000 by investing just ₹25,000.

Advantages of MTF Stocks

• Leverage: Boosts buying power with limited capital.

• Flexibility: Hold positions for days or weeks depending on broker terms.

• Ownership: Stocks are held in your demat account.

Risks Involved

• Interest Costs: Daily interest adds up quickly.

• Margin Calls: If stock prices fall, you'll need to add funds or face liquidation.

• Market Risk: Losses can exceed your initial investment if not managed properly.

Who Should Use MTF?

MTF is ideal for experienced investors and traders who:

• Understand market volatility,

• Have a short- to medium-term investment horizon,

• Actively monitor their portfolio.

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Conclusion:
MTF stocks offer a powerful way to maximize returns, but the associated risks make it crucial to tread carefully. Always use this facility with a clear strategy and sound risk management.

Would you like a list of popular MTF-eligible stocks as well?