Margin Trading Facility: Get 4X Leverage on 1000+ Stocks with MTF

Margin Trading Facility (MTF) allows equity traders to take up leveraged positions. What this means is simple - the trader will pay a fraction of the position value while the broker funds the remaining amount. At Dhan, we give up to 4X leverages on 1000+ stocks. Example below:

If a client has Rs. 25,000, he can buy a stock of worth Rs. 1,00,000 with 4X leverage provided by Dhan.

Margin trading can be useful for swing traders and BTST traders who aim to capture short-term price swings. On Dhan, you can trade with 4x leverage using margin funding. All you have to do is open a margin trading account!

MTF allows you to do more with less. That's why it's the go-to feature for swing traders and BTST traders. For example, you could get 4x leverage on Dhan on 1000+ scrips.

An interest of 0.0438% will be charged per day effective from the settlement date on the funded amount. Let's take an example where you bought shares on Monday for Rs. 40,000 (with 75% MTF funding) and sold them on the next Monday. The Buy settlement will happen on Tuesday, so that is when the interest period start, while Sell settlement happens on next Tuesday, but that is not counted for interest since the money is received that day. Here is an example:

Your fund = 10,000
Dhan funded value = 30,000
Total number of days = 7 (Tuesday to Monday)
Interest amount = Rs 91.98 (30,000 * 0.0438% * 7 days)

This means interest is charged starting T+1 settlement from Buy till a day prior to actual funds being received (Monday in this case but it may change in case there is holiday between Sell date and actual fund realisation date).

Trading with MTF on Dhan is simple and convenient. The order flow for placing a trade with MTF is the same as trading or investing. Simply select MTF as order type and place the order. Once it goes through, you'll be able to view all your MTF holdings in one single screen!

Cash as well as non cash holdings can be used as collateral while placing trades via MTF. Available Funds for MTF would be your combined ledger plus pledged holdings.

Stocks bought using Margin Funding can be held for an unlimited number of days, provided you maintain the necessary margins on a daily basis. Holdings will be liquidated if holding Coverage falls below 20%.

Shares bought using MTF must be pledged in favour of your broker. Follow these steps to authorise the pledge:

1. Go to the Positions page on your Dhan app or web on or after 4 pm on trade day.
2. Here you will see an alert to “Authorise” your holdings.
3. On tapping Authorise, you will see an intermittent page reflecting the shares that you have bought using MTF.
4. On tapping “Authorise T+1 Holdings” a CDSL page will open up wherein you will need to enter the OTP received

In such a scenario, your holdings will be converted into normal holdings. Incase of insufficient balances in your account, they will be sold by our systems on T+5 working days.

Here is a list of shares that can be bought using Margin Funding.

To exit, simply select MTF as order type while selling. No separate un-pledging required.

A pledge and un-pledge charge of ₹ 12.5 /transaction / ISIN + GST each is applicable.

Yes. You can do BTST trades using MTF. However, the interest will be applicable for one day.

Note : The interest amount may change in case there is holiday between Sell date and actual fund realisation date.

MTF holdings can be liquidated by our Risk Management Systems (RMS) under the following circumstances:

1. MTF holdings have not been pledged within the cut off time.
2. When required margins are not being maintained.
3. Holding Coverage has fallen below 20%.

Example below (refering to Question no. 1):

A client had Rs. 25,000, he bought a stock of worth Rs. 1,00,000 with 4X leverage provided by Dhan.
Now, if the value of stock falls to Rs. 93,000 client will be squared off as per below formula:
Combined Ledger : -75,000
Holding Full Value: 93,000
Holding Coverage = (-75,000 + 93,000) / 93,000 = 19%

Only securities included in Group 1 stock of the exchange categorisation are available for margin funding. Our RMS further excludes certain securities if they do not meet predefined liquidity requirements.

An order placed by you may not be booked as an MTF order due the following reasons:

1. MTF holdings have not been pledged within the cut off time.
2. When required margins are not being maintained.
3. Holding Coverage has fallen below 20%.

In such cases your MTF order is converted to delivery by default. In case of insufficient funds, securities bought are sold by RMS on T+5 working days.