Can you lose more than you invested with MTF?
Yes. The broker’s loan must be repaid whatever the shares are worth, so a large fall can cost more than the money you put in.
₹1,33,333 of shares, with ₹33,333 of your money
| Price falls 10%: you lose ₹13,333 | 40% of your money |
|---|---|
| Price falls 25%: you lose ₹33,333 | 100% of your money |
| Price falls 40%: you lose ₹53,333 | 160% of your money |
| After a 40% fall you still owe the broker | ₹20,000 |
The broker funds 75% here; the real share depends on the stock. Before interest and charges. Your broker would normally act well before a 40% fall.
Can you really lose more than you put in?
Yes. The loan has to be repaid in full, so a large enough fall leaves you owing the broker money.
If the broker funds 75%, a 25% fall wipes out your money. Beyond that, selling the shares doesn’t cover the loan, and you owe the rest. Interest and charges come on top.
How far does a price have to fall to wipe you out?
By the same share as you paid. Pay 25% and a 25% fall takes all of it. Pay 50% and it takes a 50% fall.
| You pay | Leverage | Fall that takes all your money |
|---|---|---|
| 20% | 5x | 20% |
| 25% | 4x | 25% |
| 50% | 2x | 50% |
In practice a margin call comes well before this.
Won’t the broker sell before it gets that bad?
It tries to, but a price can drop too quickly to sell at the level you’d expect.
A stock can open far below the last close after bad news, or have few buyers in a sell-off. A square-off happens at whatever price is available. You are still responsible for what is left.
Sources: NSE FAQ on Margin Trading Facility, updated 12 Mar 2025
How does interest change the sums?
It makes every result worse. In this example, 30 days of interest takes another ₹1,200, whichever way the price moves.
See how far a price must rise to cover the costs.
Sources: our broker comparison
How can you limit the damage in advance?
Work out the most you are willing to lose in rupees first, then size the position from that, not from the maximum the app offers.
Say you can accept losing ₹10,000, and you’d sell after a 10% fall. Your position should be no more than ₹1,00,000, whatever funding is on offer. A stop-loss order can help, but it doesn’t promise that exact price.
Sources: this site’s own arithmetic