Why is a nudge displayed mentioning: "Selling this stock will affect your MTF position since you have existing holdings. If you wish to hold that MTF position, avoid selling this stock"?

This nudge appears to warn you about transaction netting. When you sell shares from regular holdings whilst having an open MTF buy position in the same stock (taken on the same day), the system nets off these transactions at the end of the trading day. This results in no or a reduced MTF position being created.

The CNC sell order offsets your MTF buy position in the same stock. The shares you bought under MTF and the shares you sold from regular holdings cancel each other out. You should avoid such trades to ensure your MTF position remains unaffected.

How transaction netting affects your MTF position

Here's how the netting process works:

Example scenario

1. You take an MTF buy position for 100 shares of ABC Ltd at ₹500 each during the day.
2. Later that day, you place a CNC sell order for 100 shares of ABC Ltd from your regular holdings.
3. At the end of the trading day, the system nets off these two transactions.

Your MTF buy position for 100 shares gets offset by the CNC sell order, and no MTF position is created because the buy and sell orders cancel each other out.

How to maintain your MTF position

Avoid selling shares from regular holdings on the same day as an MTF buy to prevent these adjustments and keep your MTF position unaffected.

For more information about MTF, see Margin Trading Facility (MTF) FAQs.