Zerodha MTF Review

• Increased Buying Power: Buy stocks worth more than your available funds by paying only a margin.
• Flexible Holding Period: Hold positions as long as required without a fixed expiry, provided margins are maintained.
• Simple Interest Rate: Flat interest of 0.04% per day (₹40 per ₹1 lakh) on the funded amount.
• No Manual Unpledging: Sell MTF stocks directly; Zerodha handles automatic unpledging.
• Supports GTT & AMO Orders: Set automated trades or place orders after market hours with ease.
• Zerodha MTF BTST: Buy today and sell tomorrow using MTF (interest applies from T+1).
• Wide Stock Coverage: Trade in 1300+ NSE-listed stocks with up to 5x leverage.
• Zerodha MTF maximum limit:Get up to ₹12 crore per stock and 50 crore per account (for eligible clients).
• Integrated with Console & Kite: Easily manage, convert, and track MTF positions via Zerodha’s platform

Zerodha MTF Activation Process

1. Go to console.zerodha.com and log in with your Zerodha credentials.
2. Navigate to Account > Margin Trading Funding.
3. Click Enable to start MTF activation.
4. Complete the DDPI/PoA e‑sign process using Aadhaar and OTP if not already done.
5. MTF is activated instantly if DDPI/PoA is active, or within 24 hours otherwise.
6. Ensure your NSE Equity segment is active and KYC is in order to use MTF.

How to Place MTF Orders on Kite

1. Open Kite (web or mobile app) and add the desired stock to your MarketWatch.
2. Click on Buy for that stock.
3. Under “Product type”, select MTF instead of CNC/MIS.
4. Enter quantity and order price, and confirm that you have sufficient margin.
5. Place the order; on execution, the shares appear in holdings with an “M” tag.

Zerodha MTF Pledging & Unpledging

1. When you buy via MTF, the shares are automatically pledged to Zerodha as collateral; you do not need to place a separate pledge request.
2. Zerodha charges ₹15 + GST per ISIN per pledge and unpledge request for MTF holdings.
3. MTF stocks can be viewed under “MTF Holdings” in Console/Kite and are clearly marked with an “M”.
4. When you sell MTF holdings, Zerodha auto‑unpledges them in the backend and the sale proceeds are credited on T+1.

Zerodha MTF to Delivery / CNC Conversion

1. You can convert MTF positions to delivery (CNC) from Console or Kite by using the Convert to Holdings option on your MTF holdings.
2. Ensure you have enough free funds to pay for the desired number of shares; Zerodha will convert as many shares as your funds permit, and keep the balance as MTF.
3. Example: If you hold 10 MTF shares and have cash to pay for 5, then 5 shares are converted to CNC while 5 remain under MTF.
4. Conversion requests placed before 4 PM are processed on the same day; requests after 4 PM are processed on the next working day, and you can cancel a pending request before processing.
5. In case of short delivery in an MTF buy, the pledge for that leg is cancelled and the position can be settled in CNC using cash or other holdings as per Zerodha’s process.

How to Check MTF Interest & Statements

1. Log in to Zerodha Console and go to Funds > Interest Statement.
2. Select MTF as the type and choose the desired date range to view daily interest debits and total interest paid.
3. You can also track MTF positions and margin utilisation in Kite holdings (M tag) and on Console reports.

Holding Period & Auto Square‑off:

Zerodha MTF positions do not get squared off at the end of the day like intraday; you can hold them as long as you maintain the required margins and pay daily interest. Zerodha may square off positions if margins are not restored within the prescribed T+5 period after a margin shortfall.

BTST with MTF:

You can do BTST (buy today, sell tomorrow) using MTF; interest is charged from T+1 until you sell or convert to CNC.

Auto Square‑off Charges & Timings:

For equity/cash, the typical square‑off time is around 3:20 PM, for equity/index derivatives around 3:25 PM, and for commodities approximately 10 minutes before market close; Zerodha may levy auto square‑off charges (e.g., ₹50 + GST) where applicable.

GTT & AMO:

GTT (Good‑Till‑Triggered) and AMO (After Market Orders) are supported for MTF, allowing you to automate entries and exits without being online during market hours.

Eligible Users:

MTF is not available to NRIs, minors, custodial accounts, or clients without an active DDPI/PoA and NSE Equity segment; such clients cannot enable or use Zerodha MTF.

Pros

• Higher buying power: Use up to 5x leverage on approved stocks to capitalise on opportunities without deploying full capital.
• Flexible holding: No fixed expiry; you can hold positions as long as margin requirements are met and interest is paid.
• Seamless platform integration: Integrated with Kite and Console, with “M” tagging and one‑click conversion to CNC.
• Automated pledging: Shares bought via MTF are auto‑pledged and auto‑unpledged on sale, reducing operational effort.
• GTT & AMO support: GTT and AMO orders work with MTF, helping you manage trades even when offline.
• High funding limits: Funding up to ₹12 crore per stock and ₹50 crore per account suits high‑value traders.

Cons

• Daily interest cost: 0.04% per day on the funded amount can become expensive for long‑duration positions.
• Market & margin risk: Sharp price falls can trigger margin calls and forced square‑offs if shortfalls are not funded within T+5.
• VAR+ELM‑driven leverage: Leverage varies by stock; high‑risk stocks require higher margins and offer lower leverage.
• Limited eligibility: NRIs, minors, custodial accounts, and clients without DDPI/PoA or active NSE Equity segment cannot use MTF.
• Pledge charges of ₹15 + GST per ISIN per pledge request increase the overall cost, especially with frequent position changes.

Zerodha’s Margin Trading Facility (MTF) enhances trading capital efficiency, allowing more stock purchases with less cash. It offers up to 5x leverage on 1300+ NSE stocks, funding limits of ₹12 crore per stock and ₹50 crore per account, and integrates with Kite and Console. Suitable for experienced traders and long-term investors, MTF supports automatic pledging, GTT/AMO, BTST, and flexible holding periods. Users must monitor interest rates, margins, and volatility, especially given the impact of daily interest, margin calls, and broker-driven square-offs on portfolios. Conservative or beginner users should use MTF cautiously and understand associated risks.

Read more about Zerodha

Useful Links