Dhan MTF Review

• Up to 4x leverage on a large list of eligible stocks (over 1700 scrips, depending on the latest slab and communication).
• You pay only a portion (roughly 20–25%) of the trade value; the broker funds the rest, so you can buy more shares than your cash balance allows.
• Interest is charged only on the funded portion, typically on a per-day basis (approximately 12.49% per annum, or 0.0342% per day, in the current slabs for the lowest tier).
• Unlimited or open-ended holding period for MTF positions as long as you maintain required margins and pay daily interest.
• High stock universe and limits: funding up to about ₹1 crore per user per stock with MTF, subject to broker risk policies.
• Collateral flexibility: both cash and approved pledged shares/securities can be used as margin for MTF.
• Integrated order flow in app/web: you choose the MTF option on the buy screen, see required margin, and place orders similar to normal delivery trades.
• Daily risk checks and auto-square-off if your margin falls below a threshold (around 20% minimum margin requirement), to control losses.

Follow the below steps, and you can use MTF on Dhan: Select a stock and tap on "Margin". Select "Buy with MTF" option. Go to "Positions" screen in "Orders". Authorize MTF order before 9 PM (on the day of buying). View stocks purchased via MTF separately. For your review page, you can summarise: zero account opening and lifetime AMC, discount‑style brokerage, plus transparent MTF and statutory charges itemised via the calculator and contract notes.

Dhan treats MTF as a pledge‑based margin-funding product, where both cash and non‑cash holdings can be used as collateral to buy more shares. Your “available funds” for MTF = combined ledger balance plus pledged securities value after haircuts, which determines how much additional stock you can buy under the facility.

1. Trading With Leverage

MTF lets you buy more shares than the cash you have by borrowing part of the amount from Dhan. So instead of needing ₹1 lakh in your account, you might only need ₹25,000, with Dhan funding the rest — up to 4× leverage on eligible stocks.

Example:
If you have ₹10,000 and a stock is eligible for 4× leverage:

• You can buy shares worth ₹40,000.
• You pay the ₹10,000,
• Dhan pays the ₹30,000.
• Interest is charged on the ₹30,000 borrowed amount.

2. Interest & Holding Period

• Interest accrues from the settlement date (usually the next trading day) until the day before the funds are received after the sale.
• You pay only on the funded portion, not on the full value.
• You can hold MTF positions indefinitely — there’s no fixed expiry, as long as you maintain margins.

3. Risk & Auto Square-Off

If the value of shares drops sharply, Dhan’s risk system checks your holding coverage ratio. If this falls below ~20%, your MTF positions may be automatically sold to limit losses.

How to check Dhan MTF Stock List?

Users can check the updated eligible list directly on the Dhan MTF Stocks List page, which includes large-cap to small-cap stocks and various ETFs.

Convert MTF Positions to Delivery

Open the Dhan App - Go to Portfolio - Tap on Stocks - Select the MTF section and choose the scrip you want to convert - Tap on ‘Convert into Delivery - rewrite

Follow the below steps to activate MTF on Dhan:

• Select a stock and tap on "Margin".
• Select "Buy with MTF" option.
• Go to "Positions" screen in "Orders".
• Authorize MTF order before 9 PM (on the day of buying).
• View stocks purchased via MTF separately.
• For your review page, you can summarise: zero account opening and lifetime AMC, discount‑style brokerage, plus transparent MTF and statutory charges itemised via the calculator and contract notes.

Pros

• Higher buying power: Up to 4X leverage and the ability to use both cash and securities as margin allow larger positions with the same capital.
• Clear cost visibility: The MTF calculator breaks down margin required, interest, brokerage and all regulatory levies before you commit.
• Wide coverage: 1,700+ eligible stocks advertised under the Margin Trading Facility support diversified positional strategies.
• Integrated platform: Same Dhan app/web interface for cash, MTF, pledging and other products, with a unified experience and support ecosystem.

Cons

• Interest drag: Even at 12.49%+ p.a., interest on large funded amounts over long holding periods can significantly reduce net returns or deepen losses.
• Leverage risk: 4X exposure magnifies drawdowns; adverse price moves can quickly erode margin, trigger margin calls and RMS liquidations (as in the 15.8% coverage example).
• Operational complexity: Users must understand pledging, margin coverage, and daily interest to avoid surprises; this is not ideal for beginners unfamiliar with leveraged products.

Dhan MTF helps investors increase their equity buying power by paying only a part of the total stock value while Dhan funds the remaining amount (up to about 4X leverage). This allows you to take larger positions, but both profits and losses are amplified.

You can hold MTF positions for a long period as long as you maintain the required margin. If the margin falls below the required level (around 20%), your position may be forcibly squared off.

MTF is suitable for short- to medium-term strategies when the expected returns are higher than the interest and other charges.

Before using Dhan MTF, ensure you have a clear exit plan and calculate whether your expected returns can cover the interest and additional costs.

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