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How Interest Is Charged on MTF Positions

In a Margin Trading Facility (MTF), investors borrow funds from a broker to buy stocks. Interest is charged on the borrowed amount, usually calculated daily based on the outstanding balance and the brokeru2019s rate. The longer the position is held, the more interest accrues, and it is typically debited from the investoru2019s account periodically, such as monthly.

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How Interest Is Charged on MTF Positions

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  1. Read blog - https://navia.co.in/margin-trade-funding How Interest Is Charged on MTF Positions

  2. Read blog - https://navia.co.in/margin-trade-funding What Is MTF Interest? • In MTF, your broker lends you money to buy more shares than your cash allows. • Since it’s like a loan, the broker charges daily interest on the borrowed amount. • This interest continues until you close or square off your position.

  3. Read blog - https://navia.co.in/margin-trade-funding How Is Interest Calculated? • Interest = Borrowed Amount × Interest Rate × Number of Days Held • Example: If you buy shares worth ₹1,00,000 but only pay ₹40,000, the broker funds ₹60,000. • If the interest rate is 12% p.a. and you hold for 10 days → • Interest = 60,000 × (12% ÷ 365) × 10 ≈ ₹197

  4. Read blog - https://navia.co.in/margin-trade-funding When Do You Pay It? • Interest is usually billed daily but collected monthly or at position closure. • It is automatically deducted from your trading account. • The longer you hold the position, the higher your interest outgo.

  5. Read blog - https://navia.co.in/margin-trade-funding Key Things to Remember • Interest applies only on the funded portion, not on your margin contribution. • Rates vary by broker and are higher than normal loans. • Use MTF for short-to-medium term trades, not for long holding, otherwise interest can eat into profits.

  6. Disclaimer Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are for illustrative purposes and are not intended as recommendations. Brokerage will not exceed the SEBI prescribed limit. Navia Markets Ltd ,SEBI Registration No.INZ000095034-NSE Member code for CM, FAO & CD: 07708 - BSE Clearing No. for CM, FAO & CD: 6341-MCX Member ID: 45345 NSDL DP ID: IN300378-CDSL DP ID: 12086500-SEBI Registration No. for DP: IN-DP-311-2017-GST Registration number :33AAACM4739R2ZZ-Registered office: Ganga Griha, 4th & 5th Floor, No.9, Nungambakkam High Road, Chennai - 600 034 Email ID: ig@navia.co.in - Contact No: +91 70100 75500 https://bit.ly/naviadisclaimer Read blog - https://navia.co.in/margin-trade-funding

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