What is an MTF Calculator and Why Every Trader Should Use It?
What is an MTF Calculator and Why Every Trader Should Use It?
Blog Article
Margin Trading Facility (MTF) is a powerful tool that allows traders to buy more stocks with less upfront capital. But how do you know exactly how much margin you need or how much leverage you're getting?
That’s where an mtf calculator comes in.
What is an MTF Calculator?
An MTF calculator is an online tool provided by brokers that helps investors calculate:
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Margin required to purchase MTF-eligible stocks.
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Leverage ratio based on the margin.
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Interest cost on the borrowed funds.
Why use it?
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Plan your trades accurately before execution.
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Understand exact upfront capital requirements.
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Know the cost of funding to avoid surprises later.
Example of MTF Calculation:
| Stock Price | Quantity | Total Value | Margin % | Margin Required | Broker Funds |
|---|---|---|---|---|---|
| ₹1,000 | 100 | ₹1,00,000 | 25% | ₹25,000 | ₹75,000 |
An MTF calculator will instantly tell you that with ₹25,000, you can buy ₹1 lakh worth of stocks — and also show you the daily interest cost on ₹75,000 borrowed from the broker.
Conclusion
An MTF calculator is not just a convenience—it’s a risk management tool. By knowing your exact exposure and costs, you can trade confidently and avoid margin surprises.
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