Margin Trading Facility (MTF) is a service offered by Alice Blue that allows you to buy shares by paying only a part of the total amount. The remaining balance is funded by Alice Blue, and interest is charged on the borrowed amount.
Let’s say you have ₹1000 in your trading account and want to buy a stock priced at ₹1000 per share.
If the stock is eligible for 3x MTF margin with Alice Blue, you can buy 3 shares even though you only have ₹1000.
Here’s how the calculation works:
Price per share = ₹1000
Number of shares you want to buy = 3
Total value of the trade = ₹1000 × 3 = ₹3000
Your contribution (margin) = ₹1000
Amount funded by Alice Blue = ₹3000 – ₹1000 = ₹2000
So, with just ₹1000, you’re able to buy shares worth ₹3000 using MTF.
Note: Alice Blue will charge interest on the ₹2000 borrowed, typically around 0.04% per day, which equals about 18% annually.
1 Buy More with Less Money
> You can purchase more shares even if you don’t have the full amount.
> Example: With ₹10,000 and a 4x margin, you can buy shares worth ₹40,000.
2 Hold Stocks for Delivery
> Unlike intraday trading, MTF allows you to take delivery of the stocks and hold them as long as you want, if you maintain the required margin and pay interest.
3 Potential for Higher Profits
> In a rising market, MTF helps you make higher returns because you control more shares with less capital.
4 No Need to Sell Immediately
> You can hold onto your positions over days or weeks—no forced same-day squaring off like in intraday margin.
5 Easy to Use
> MTF can be activated with just a one-time agreement and used directly while placing orders.
NO, but interest will be charged by Alice Blue on the funded amount.
