MTF Calculator

Calculate the interest & margin requirements for margin trading.


LTP: 00
Total buy value ₹0.00 with ‘Pay Later (MTF)’

You pay : ₹0.00

Funding by Kotak Neo : ₹0.00

The Pay later (MTF) calculator is a tool designed to help you take trades worth a higher value with your existing funds. It lets you understand the amount you need to put in, along with the funds provided by Kotak Securities. This allows you to make an informed decision on the overall higher trade value, thus giving you a potential scenario on how to maximise your gains in profit.

What is Margin Trading Facility (MTF)?

Margin Trading is a facility that enables you to trade or invest even when you are short on funds. Here, you keep a small amount (margin) in cash or stocks as collateral in your Demat, and Kotak Securities will fund the remaining at a low-interest rate.

In short, you pay a fraction of the total trade value to take positions for an indefinite period, thereby increasing your chance of capitalising market volatility with fewer funds in hand.

Example of Margin Trading Facility

Let’s say you want to buy a company's stock trading at ₹100 per share. To buy 100 shares outright, you'd typically need ₹10,000 (₹100/share * 100 shares). However, Margin Trading Facility (MTF) allows you to take this trade even if you don't have the full amount upfront.

For example:

You have ₹2,000 available for investment and you are getting 4x leverage on the stock on Neo. This means that you can take 4 times the initial trade value. Meaning, that you put in ₹2,000 and we put in ₹8,000 for a trade value of ₹10,000.

So now, you can purchase your 100 shares of the same company at ₹100 per share, where you provide ₹2,000 and we provide the remaining ₹8,000 needed to complete the purchase.

Now, suppose the share price increases to ₹125 each. This means the total value of your 100 shares has risen to ₹12,500 (₹125/share * 100 shares). By selling your shares at this point, you'd earn a profit of ₹2,500 (₹12,500 - ₹10,000).

Here's the thing about MTF: You were able to profit at ₹2,500 on your initial investment of just ₹2,000!

However, it's important to remember that you have to pay a nominal interest fee to your broker for lending you ₹8,000. This fee will be deducted from your ₹2,500 profit. With Pay later (MTF) you can maximise your return on investment.

Now, let’s see a negative scenario when the share price falls. In the same example, let’s say that the share price drops to Rs. 75 which brings your value of shares down to Rs. 7,500 from the initial 10,000. In this case, you might face margin shortfall requirements and your total loss stands at Rs. 2,500 (Rs. 10,000 – Rs. 7,500) outside of the interest you were charged on the borrowed amount.

The above details/scenario are just as an example basis.

How Do You Invest and Trade In Margin Trading Facility?

You can use the Pay later (MTF) facility in five simple steps with Kotak Neo:

  • Go to the Buy Order page of your preferred stock
  • Enter quantity and select “Pay later” under the product type
  • Accept the disclaimer
  • Review your order details
  • Swipe to Buy: Your order will be processed under MTF

Benefits of Margin Trading Facility

  • Enhance Your Buying Power: Get up to 4x leverage on 1000+ stocks
  • Trade Now and Pay later: Low on funds? We'll cover the remaining amount for you
  • Cashless Trading: Use your shares and ETFs as collateral instead of cash to create positions
  • Backed By Our Experts: Access MTF monthly picks, backed by our research team
  • Unlimited Days of Holding: Hold your positions for as long as you want
  • Lower Interest Rate: Obtain funding at a nominal interest rate of as low as 9.75% p.a. or 0.025% per day

FAQs On Margin Trading Facility Calculator

The MTF interest is calculated on the outstanding amount of your position. This is the difference between the total value of the shares you buy and the initial margin you pay upfront. The interest rate charges will depend on your brokerage plan with Kotak Securities and the number of days for which you have an open Pay later (MTF) position in the stock

The advantages of using Kotak Securities’ MTF Calculator include:

  • Margin required: The MTF calculator helps determine the margin required to open and maintain your positions. This ensures you have sufficient funds to support your trades and stay prepared for the margin calls. You can pledge your existing stocks and ETFs to get margin and take higher positions with Pay later on Kotak Neo
  • Get up to 4x leverage on 1000+ stocks: With Kotak Neo, get up to 5x leverage on stocks (add a link to the stock list here)
  • Lower Interest Rate: Obtain funding at a nominal interest rate of as low as 9.75% p.a. or 0.025% per day

1x leverage may initially seem that you get no benefit from purchasing the share in Pay Later (MTF). But, using Pay later on 1x stocks means that you do not need to put in any additional cash to purchase the shares. Instead, you can pledge your existing holdings for margin and then take a trade based on that. Cash, existing stocks, and ETFs kept in your Demat account can be used as a margin after pledging to take a trade in MTF, without adding any additional funds.

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