Why is MTF risky?
It multiplies your losses as well as your gains, charges interest every day, and lets the broker sell your shares if prices fall too far.
The same ₹33,333 of your money, if the share price falls 10%
| Bought with your own money: ₹33,333 of shares | −₹3,333 |
|---|---|
| Bought with MTF: ₹1,33,333 of shares | −₹13,333 |
| MTF loss as a share of your money, before interest | 40% |
The broker funds 75% here; the real share depends on the stock. Zerodha's published rates, checked 2 Nov 2026. The broker funds 75% here; the real share depends on the stock.
Why do small price falls hurt so much?
Because your gain or loss is worked out on the whole position, not on the money you put in. With 4x, a 10% fall costs you 40% of your own money.
The broker’s share of the trade doesn’t lose anything. It still has to be paid back in full. So every rupee of the fall comes out of your part.
The same works in your favour when prices rise, which is why MTF looks so good in a rising market.
Can you just wait for the price to recover?
Not always. If the price falls far enough, you must add money or the broker can sell your shares, even if the price recovers later.
Someone who bought with their own money can hold through a fall. With MTF, that choice can be taken away from you. See how a margin call works.
Sources: NSE FAQ on Margin Trading Facility, updated 12 Mar 2025
Does waiting cost anything?
Yes. Interest is charged every day, so a stock that goes nowhere still loses you money.
See what daily interest adds up to and how far a price must rise to cover it.
Sources: our broker comparison
What has happened to MTF money in a crash?
India’s total MTF book fell 57.3% between 26 Feb 2020 and 9 Apr 2020.
The worst single day in percentage terms was 13 Mar 2020, when the book fell 13.66%. These figures show the whole market’s book shrinking, from selling and repayments together. They don’t show how many investors chose to sell and how many were sold out. See the records page and risk page.
Sources: mtf.trading, from NSE/BSE disclosures, via our records page
Why does MTF feel safer than it is?
Apps call it extra buying power, but it is a loan. It has to be repaid whatever the shares do.
A larger balance on screen makes it easy to buy more than you would with your own money, or to use more of it after a loss to try to win it back. Decide your limit before you trade, not during. Our checklist can help.
Who should stay away from MTF?
Anyone new to the market, anyone using money they can’t afford to lose, and anyone with no spare cash to answer a margin call.
Buying fewer shares with your own money is slower, but you can’t get a margin call on it and it costs no interest.