Only the most traded stocks qualify, you pay a margin based on each stock’s risk, and the shares stay pledged to your broker. If the price falls, you top up or the broker sells.
| You pay, if the stock trades in F&O (27.5%) | ₹27,500 |
|---|---|
| You pay, if it doesn’t (37.5%) | ₹37,500 |
| The broker funds the rest, for the F&O stock | ₹72,500 |
For a stock whose risk numbers are VaR 12.5% and ELM 5%: the exchange’s measures of how far its price could fall in a day, plus a safety buffer. F&O stocks pay VaR + 3 × ELM, others VaR + 5 × ELM. Worked from the example in NSE’s MTF FAQ; real numbers change daily.
Only equity shares and equity ETFs in “Group I”, the most traded and easiest to sell.
Each broker then chooses its own list from these and sets how much it will fund for each stock. Riskier stocks get less funding.
Sources: NSE FAQ on Margin Trading Facility, updated 12 Mar 2025
A margin set by the stock’s risk: VaR plus 3 times ELM for stocks traded in F&O, and VaR plus 5 times ELM for the rest.
VaR and ELM are risk numbers the exchange sets for each stock every day. Riskier stocks have higher numbers, so you pay more of the price yourself. You can pay this margin in cash, or with Group I shares or equity ETFs you already own, valued after a cut (a “haircut”).
Sources: NSE FAQ on Margin Trading Facility, updated 12 Mar 2025
They come to your own demat account and are pledged to the broker automatically until you repay.
Since 2020, shares funded under MTF can only be held by pledge, not moved into the broker’s account. Since SEBI’s June 2024 rule, they are credited to your demat and pledged without you having to approve each pledge. Most brokers charge a small fee to pledge and unpledge.
Sources: SEBI circular on margin pledges, 25 Feb 2020; SEBI circular on direct pay-out to your demat (via CDSL), 5 Jun 2024
You must top up the margin. If you don’t, the broker can sell your shares.
The broker has to keep your margin at the required level every day, on the lower of what you paid or what the shares are worth now. If the shares fall below what was funded, it also collects the difference (mark-to-market). If you can’t add money or shares in time, it squares off the position, often at a bad price.
Sources: NSE FAQ on Margin Trading Facility, updated 12 Mar 2025
It depends on the broker, and most don’t publish all three. Here is what each one says on its own website.
Only Zerodha publishes same-day selling. 6 of 14 publish conversion to delivery, and 9 publish a holding limit or say there is none. “No limit” means as long as you keep enough margin.
| Broker | Sell same day | Convert to delivery | How long you can hold |
|---|---|---|---|
| 5paisa | Not published | Yes | No limit |
| Angel One | Not published | Yes | No limit |
| Dhan | Not published | Yes | No limit |
| Fyers | Not published | Not published | Not published |
| Groww | Not published | Not published | Not published |
| HDFC Sky | Not published | Not published | Not published |
| ICICI Direct | Not published | Not published | Up to 450 days |
| Kotak Neo | Not published | Yes | No limit |
| m.Stock | Not published | Not published | No limit |
| Motilal Oswal | Not published | Not published | Not published |
| Paytm Money | Not published | Not published | Not published |
| SBI Securities | Not published | Yes | Up to 520 days |
| Upstox | Not published | Not published | No limit |
| Zerodha | Yes, no interest charged | Yes | No limit |
Yes. A broker’s total MTF lending is capped by its own money and borrowing, and no single client can take more than 10% of it.
Sources: NSE FAQ on Margin Trading Facility, updated 12 Mar 2025