1. What is the margin trading interest charge on Dhan?

The current interest charge for margin trading (MTF) on Dhan is 12.49% per annum for amounts up to ₹5,00,000. The rate increases for higher funded amounts to13.49% for ₹5,00,000.01 to ₹10,00,000, and 14.49% for ₹10,00,000.01 to ₹25,00,000, with further slabs for larger borrowing. This interest is calculated daily on the margin-funded amount.

2. Can I Apply for an IPO through Margin Trading?

No, IPO applications in India cannot be made using margin trading. IPO shares are only allocated for full cash payment. Investors need to have the amount of application in their bank account while applying through ASBA (Application Supported by Blocked Amount).

3. Can I convert my MTF position to a delivery position?

Yes, this process is usually referred to as Convert to Delivery (CTD). You can convert your leveraged MTF position to a normal long-term holding by paying the entire outstanding funded amount (the borrowed amount) to your broker. After full payment, the shares are removed from the pledge and credited to your demat account as free holdings.

4. Is margin trading appropriate for first-time traders?

No. Margin trading involves high risk because of leverage. It's more appropriate for experienced traders who have a grasp of market dynamics, volatility, and risk control. Beginners need to trade with cash or mutual funds first before diversifying into margin-based trading.

5. Are margin trading positions squared off automatically?

Yes, to avoid excessive loss, Dhan has automated risk management that will square off your positions either in case of insufficient margin requirements or in case of holding coverage falling below the specified limits, for example, 20%.