New guidelines w.e.f. 1st September, 2020, click here
Margin Trading Facility
Time and tide wait for no man. Nor does the stock market.
With our Margin Trading Facility (MTF), never miss a good market opportunity due to a cash shortage.
MTF lets you trade even with limited funds. It lets you buy select stocks with only a certain percentage (margin) of the trade value. The rest can be borrowed from us.
What does margin trading mean?
Normally you would use your own funds to buy stocks. However, some stocks may suddenly look attractive because of favourable market conditions or some sector/company specific news. In such cases, instead of letting the opportunity go due to shortage of funds, you can use Margin Trading Facility instead.
With MTF, you can pay a small percentage of the trade value (just like a down payment for a loan) and borrow the balance from us. This margin amount may vary from stock to stock.
So to sum it up, with Margin Trading Facility, you get leverage to buy certain stocks even if you don’t have the entire amount in your trading account.
How does Margin Trading Facility work?
- Use MTF for select stocks in the cash segment
- Keep the required percentage of the total transaction amount as margin
- Use your stocks* instead of cash as margin, if required
- Get the rest of the amount from us
*As per the new SEBI guidelines, effective 1st September 2020, stocks would need to be pledged in favour of the broker to use them as margin. The new pledging process is simple, safe and involves a secure OTP. You can start the pledging process on any of our online trading platforms.
How to activate Margin Trading Facility?
On the website:
- Log into www.kotaksecurities.com
- Go to the ‘New Products’ menu and click on ‘Margin Trading’
- Select the option ‘Manually allocate to Margin Trading’ if you want to use MTF only for certain orders / Select the option ‘Automatically allocate to Margin Trading’ if you want to use MTF for all future orders
- Click on ‘Accept’
On KEAT Pro X:
- Log into KEAT Pro X
- Go to ‘Web Links’ and click on ‘Product Services’
- Click on ‘Margin Trading Disclaimer’
- Select the option ‘Manually allocate to Margin Trading’ if you want to use MTF only for certain orders / Select the option ‘Automatically allocate to Margin Trading’ if you want to use MTF for all future orders
- Click on ‘Accept Disclaimer’
On Kotak Stock Trader mobile app:
- Log into Kotak Stock Trader and go to ‘More’
- Head to the ‘settings’ option, click on ‘Disclaimers’ & Select ‘T&C margin trading’ under dropdown
- Select the option ‘Manually allocate to Margin Trading’ if you want to use MTF only for certain orders / Select the option ‘Automatically allocate to Margin Trading’ if you want to use MTF for all future orders
- Click on ‘Accept Disclaimer’
Do note:
- The Margin Trading Facility is available only once you accept the Margin Trading Facility disclaimer.
- No minimum margin is required to activate Margin Trading Facility.
- You can use Margin Trading Facility for After Market Orders as well. This facility is available across KEAT, KST, and website platforms.
- Order/s under Margin Trading Facility shall be placed only on National Stock Exchange of India.
Disclosure to clients availing MTF and who transact in ETF either as collateral or funded stock - Clients are informed that KSL also acts as a market maker in some Exchange Traded Funds (ETFs) which are now permitted for Margin Trading as collateral or funded stock. Hence, KSL may be engaged in transaction/s involving such securities and may earn compensation as a market maker in these financial instruments.
+ Expand AllFrequently Asked Questions (FAQs)
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Q What is Margin Trading Facility?A
With Margin Trading Facility, you can buy certain stocks by paying just the margin amount and not the total value. That is, you can carry the position by just maintaining minimum margin and borrowing the rest from us.
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Q Which types of margin are allowed?A
You can use cash, cash equivalent (bank guarantee/bank fixed deposits) or pledged shares as margin.
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Q What amount of margin is required while buying stocks?A
The required margin may vary for different stocks. Click here to know the required margin in select stocks. .
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Q Which segments is Margin Trading Facility available for?A
Margin Trading Facility is available only for selective scrips in the Cash segment.
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Q How do I get details of my Margin Trading Facility transactions?A
You will receive communications regarding confirmation of orders/trades, margin calls, decision to liquidate the position/security on your registered email/mobile number.
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Q What if I have transferred margin to my account but have not traded?A
Margin Trading Facility accounts in which there have been no transactions for 90 days shall be settled immediately.
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Q How can I carry my funded positions?A
You can carry your funded positions by maintaining the minimum required margin with us & till the interest is served Also, w.e.f. 1st September 2020, you need to pledge your Margin trading positions within T+2 days else your positions may get liquidated.
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Q What if I want to exit the Margin Trading positions I’ve taken?A
You can exit Margin Trading positions by paying the total debit amount/shortfall or by selling your positions.
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Q How will interest be charged in case I have created position in MTF?A
Interest will be charged from T+2 day on total debit position including Debit under normal Plus debit under Margin trading Position. In case you have sufficient credit under normal segment to cover margin trading debit, no interest will be charged to you.
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Q What is the procedure for pledging open position in MTF?A
a. In case of MTF trades, Kotak Securities will initiate a pledge request for net long position at the EOD.
b. The customer will receive communication from NSDL and will have to follow the steps.
c. Once the customer shares the OTP, and on successful verification the MTF shares will be pledged in favour of KS MTF account.
For your trades in Margin Trading Facility (MTF), you are requested to follow the due process and confirm the pledge within an appropriate time frame (T+2 days) of purchase of these securities. In case you are unable to complete the pledge, such positions might have to be liquidated by us.
Have more questions? Click here to find answers.
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