s">Here are some frequently asked questions:

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1. What is the maximum time I can hold the shares under MTF on Dhan?

Dhan allows traders to hold MTF-funded shares indefinitely, provided that you maintain the required margin, pay interest on time, and meet the holding coverage ratio. There’s no predefined expiry date. Dhan keeps track of your margin status. In case your holding coverage ratio drops to less than 20%, Dhan has the right to square off your holdings to limit losses.

2. What is the holding coverage ratio, and why do we need it?

The Holding Coverage Ratio evaluates the safety of your MTF holdings. It is calculated as: Holding Coverage = (Combined Ledger + Stock Value)Total Stock Value×100 On Dhan, you would have to hold at least 20% coverage. If this ratio falls below the threshold, Dhan will automatically liquidate your holdings to avoid losses on the shortfall of margin.

3. How is interest calculated for MTF positions on Dhan?

The interest is calculated on the amount that is funded by Dhan on a per-day basis and is debited at the end of the month from your account. The current MTF interest rate offered by Dhan starts from 12.49% per annum, or approximately 0.0342% per day. Through the Dhan MTF calculator, you can estimate the interest cost you pay before using MTF. This will allow you to plan your holding period and prevent cost overruns.

4. Do I have the flexibility to convert my MTF holdings to delivery?

Yes. Dhan allows you to change MTF shares to delivery at your own will. After paying back the amount funded and interest, your holdings are converted to delivery holdings. This alternative is especially helpful when you intend to hold the stocks for the long term without leverage.

5. What happens if my MTF stock becomes ineligible or my margin falls short?

Dhan has the authority to issue a margin call either when a stock is removed from the Dhan eligible list of MTF or when your margin coverage falls below the required minimum. If you fail to top up the margin by the due date, your holdings will be automatically liquidated to settle exposure.