Can you explain how Margin Trading Facility (MTF) works with an example?

Yes, here’s a simple example to illustrate how MTF works

Let’s assume you have Rs. 25000/- in your account and you want to buy share worth Rs. 1,00,000/-

Let’s understand how the Margin Trading Facility work.

• You want to buy shares worth ₹1,00,000
•  Under MTF, you pay 25% = ₹25,000
• Share India funds the remaining 75% = ₹75,000
• Interest rate: 18% per annum (just an example; actual rate may vary)
• You hold the position for 15 days

Interest Calculation:

Formula: Interest = (Borrowed Amount × Interest Rate × Days Held) ÷ 365

Plugging in the values:
= (₹75,000 × 18% × 15) ÷ 365
= (₹75,000 × 0.18 × 15) ÷ 365
= ₹555.00 (rounded off)

So, interest charged for 15 days = ₹555.00

You sell the share @ Rs. 1,10,000/- after 15-Days, now you will pay Share India 75000 +555.00 = Rs. 75,555.00

Your net profit is 10000-555.00= Rs. 9445.00.