AxisDirect MTF Review

• Higher Buying Power: Get leverage of up to 4X on eligible stocks, allowing you to take larger positions with the same capital.
• Lower Upfront Payment: You need to pay only 20% or more as margin (depending on the stock), while Axis Direct funds the remaining amount.
• Longer Holding Period: Positions can be held for up to 240 trading days under the MTF facility.
• Flexible Square-Off: You can square off your MTF position anytime before the due date.
• Convert to Delivery Anytime: Investors can pay the remaining amount whenever they want and convert the position into normal delivery, which stops further interest charges.
• More Investment Opportunities: Higher buying power allows you to spread your investment across multiple stocks instead of investing in only a few.
• Wide Stock Availability: The Pay Later facility is available on 750+ approved stocks, with margin requirements based on stock category, exchange rules, and the broker’s risk policies.

1. Activate MTF/Pay Later: First, ensure the Pay Later facility is activated in your Axis Direct trading account.
2. Select Pay Later Product Type: When placing a buy order for an eligible stock on the Axis Direct platform (web or mobile app), choose "Pay Later" from the product type dropdown.
3. Order Placement: Enter the quantity and price, then place the order. You only need to have the required margin (around 20%) available in your account.
4. Shares Delivered to Demat: Once executed, the shares are delivered to your demat account.
5. Pledge the Shares: Complete the online pledge process through your demat provider (NSDL/CDSL) on the same day to maintain the position. The pledged shares act as collateral for the funded amount.
6. Interest Charged Daily: Interest on the funded portion is calculated and charged daily based on the outstanding borrowed amount.
7. Square Off or Convert: You can square off your MTF position anytime by selling the shares, or you can convert it to a regular delivery position by paying the full outstanding amount.

Pros:

• Amplified Returns: Up to 4X leverage can magnify profits when the market moves in your favour.
• Capital Efficiency: Free up cash for other investments or opportunities while still maintaining positions.
• Flexibility: Hold positions beyond intraday without needing full capital upfront.
• Diversification: Spread risk across multiple stocks with the same capital base.

Cons:

• Magnified Losses: Just as profits are amplified, losses are too. A sharp adverse move can quickly erode capital.
• Daily Interest Costs: Interest charges accumulate daily, eating into profits, especially if positions are held for extended periods.
• Margin Calls: If the stock price falls and margins drop below requirements, you may face margin calls requiring you to add funds or face forced liquidation.
• Complexity: Requires understanding of leverage, pledge processes, and margin maintenance, making it unsuitable for beginners.
• Limited to Eligible Stocks: Only select stocks approved by Axis Direct are available for MTF, limiting your choices.

Axis Direct Margin Trading Facility (MTF) enables investors to increase buying power and take delivery positions by paying only a portion of the trade value upfront. With leverage of up to 4X, it offers capital efficiency, flexibility, and diversification opportunities.

Read more about AxisDirect

Useful Links