Why there is 10L limit in MTF per scrip
When there is 50L total limit, then it should be upto me how to use that limit
in 5 positions of 10L or 25 positions of 25L
What is the base of this 10L limit?
Remove it.
We kept these limits while taking MTF live, we will reevaluate these and increases it soon.
I think this is a risk management practice, Hemant.
MTF book is essentially a loan book for the broker and smaller tickets help the broker to spread risk per security.
Think of this like how banks want to give more smaller loans to retail, to spread risk.
Whether to make this limit up to 20l per scrip and 1 Cr per client exposure, is something we can ask the broker. Let’s see.
Currently Zerodha is offering a LAS (Loan against Securities) loan up to 1 Cr. per client. So, extending the same thing here seems likely. (Both LAS and MTF are secured via collaterals, i.e, pledged securities)
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So when can I transfer MTF shares into holdings. I have enough money to cover. There should be an option to convert MTF holdings to Normal holdings.
Previously, only 80% of the sale proceeds were available on the same day, with the remaining 20% accessible the next day. However, as of October 7, 2024, regulatory changes now allow 100% of the proceeds from selling holdings to be available the same day for regular trades.
For Margin Trading Facility (MTF) holdings same rules are followed or not?
if not followed then,any future possibility for available this system.
This is a regulatory thing, when ever they say it can be allowed we will allow.
Btw we have increased the limits to 50 lakhs per scrip and 5 cr per user based on the user feedback.
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The FAQs on MTF still mention 50l per scrip though.
Assuming it’s 1 Cr per scrip now and the FAQs will be updated shortly.
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How can I see the amount of interest i have paid till date. It is an essential feature.
@siva @Meher_Smaran
zerodha is not allowing me to convert mtf position to delivery…
all other brokers allows this essential feature…
when are you going to work on this ?
@siva @nithin Why is the MTM loss higher than the loss for the position. Even though I bought the scrip on different dates and brought my average price down, you are still holding higher MTM loss than the actual loss in the scrip.
It may make sense for holding MTM loss for different scrips to some extent. But for the same scrip, it’s outrageous. I am being deprived of the interest as well as any opportunity that may arise. The margin being held is 3x of the actual loss in the scrip. Your MTF system is flawed to a great extent.
Further, the facility of converting MTF position to CNC is taking ages for you. Neither have you provided option of adding cash to the MTF position in order to bring down the interest charged. On top of that you are holding 3x MTM.
Expected a lot better from you. You brought MTF after 3 years and this is what you bring forth.
We are on it, in a week or two we should allow this.
Dear Team,
One more issue with the MTM margins for MTF is that you currently block funds only based on positions in loss and not for the overall MTF account.
For example, Stock 1 is in profit of Rs. 50,000 and Stock 2 is in Loss of Rs. 50,000.
The current backend logic of Zerodha will not consider this MTF account as breakeven and still block Rs. 50,000 as MTM losses.
This is a big difference compared to Futures where the MTM funds are blocked across positions and not individually.
So, Although a client could be overall in Profits in MTF, the unrealized gains don’t flow into funds unless the scrip is sold (Just like cash delivery), but the unrealized losses gets progressively blocked, stifling the account of funds and leading to forced selling sometimes.
Someone needs to look into this ASAP.
Mark-To-Market (MTM) margins daily based on the buy price of your open positions. These MTM margins are reset at the end of each trading day, and new margins are blocked for the next day.
If you buy the same stock on different days, MTM is calculated separately for each day’s average buy price, even though your total position appears as a single holding.
Since stock prices fluctuate daily, the concept of MTM ensures that any potential high-volatility losses are promptly settled. This is explained in our support article. We’ll soon introduce a detailed MTM breakdown, providing a clearer view of how Mark-To-Market (MTM) margins are calculated for each trade.
Don’t you think I know that?
I’m saying this is a flaw in your algorithm. Why shall my positions be calculated separately if they belong to the same scrip. That’s just abuse of my funds on which you might be earning float income. And costing me the same interest or opportunities in the market.
Holding 3x the MTM required is illogical. Other brokers like mStock, Kotak Neo are far more better in their approach of handling MTF positions. @nithin @siva
This is how it should be, there is no marking to market for profit/loss for MTF like futures.
I Understand that @siva, but currently Zerodha is marking to market for loss making positions only and blocking that amount in the funds.
Whereas, the positions in profit are ignored if they are adding gains in MTF portfolio.
In this way, any ledger will always have funds blocked as some stocks can always be into loss, although entire MTF portfolio is in profit.
Blocking of funds should be on a MTF account level, not on stock level.
No, blocking at individual stock level only, unrealised gains can’t be used for other stock, only once realised gains will be passed, this is more like equity unlike for futures. where one loss is offset by other profit. Our margins also will be blocked like that only.
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