How to buy stocks using Margin Trading Facility (MTF)?

To buy stocks using the Margin Trading Facility (MTF), DDPI must be enabled in the Zerodha account. To learn more about MTF, check out MTF FAQs.

To place a buy order using MTF on Kite web, follow these steps:

1. Select a stock from the approved list of securities for MTF.
2. Hover over the stock and click on B to open the buy order window.
3. Click on Regular and then on MTF.
4. Enter the quantity and the price.
5. Click on Buy.

After placing the order, a pledge request will be sent via email by 5:30 PM on the same day. For the MTF order to be successful, the pledge request must be accepted before 7 PM. To authorise the pledge request, follow these steps:

1. Click on the link provided in the mail.
2. Enter PAN Card No. or the 16-digit Demat Account No.
   
3. Click on Submit.
4. Click on the checkbox to select the instruments.
5. Click on Generate OTP and enter the OTP received on mobile and email.
6. Click on Submit.

If shares are not pledged before the 7 PM cut-off:

• The trade will automatically convert to a delivery trade (CNC).
• If there are insufficient funds to cover the full margin for a delivery trade, the Zerodha account will display a negative balance.
• If the negative balance remains uncleared, Zerodha will sell the shares purchased using MTF to recover the outstanding amount.

The charges for using 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: 0.03% or ₹20, whichever is lower.
• Pledge charges: ₹30+ GST per ISIN per pledge, and no charges for unpledging.
• Square-off charges: ₹50 + GST per order squared off by Zerodha.