What is an MTF Calculator? A Quick Guide
What is an MTF Calculator? A Quick Guide
Blog Article
When dealing with Margin Trading Facility (MTF), understanding your borrowing capacity and potential costs is crucial. This is where an MTF calculator comes into play — a handy tool for every investor using margin trading.
What is an MTF Calculator?
An mtf calculator is an online tool provided by stockbrokers that helps investors calculate the margin requirement, eligible funding amount, and interest payable when using the Margin Trading Facility (MTF).
In simple terms, it tells you how much margin you need to pay and how much the broker will fund for your stock purchases.
Why Use an MTF Calculator?
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Clarity on Margin Requirement: Know exactly how much cash or securities you need to put upfront.
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Estimate Interest Costs: Understand how much interest you'll be charged on the borrowed funds.
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Better Planning: Helps strategize trades by comparing costs versus potential returns.
Example of MTF Calculator Output
| Trade Value | Margin Required | Broker Funding | Interest Rate |
|---|---|---|---|
| ₹1,00,000 | ₹25,000 (25%) | ₹75,000 | ~18% p.a. |
How to Use an MTF Calculator?
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Enter the total trade value (cost of stocks you want to buy)
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Select margin percentage (as required by your broker)
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View results: The calculator will show margin needed, funding amount, and estimated interest.
Final Thoughts
An MTF calculator is an essential tool to make informed decisions when using margin trading. It gives transparency about your costs, funding limits, and risk exposure — helping you trade smarter and with confidence.
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