@tanwarrht Looks like it.
But I am sure Zerodha will also introduce unlimited holding period.
Please bring taking delivery of those stock also when we have ready to paid full amount
Can check this.
This is My First Post and I am writing thinking that it would be read and considered . It is detailed but worth reading. have been using MTF in many platforms and explored quiet a few below are my genuine wishlist/feedback which can be added in Zerodha to make it the best platform in the industry.
Feature Wishlist
I would request other members to add the MTF features that they love.
Lets make Zerodha a best MTF solution providing platform.
Thanks for your feedback, I am adding my colleague @VenuMadhav who leads the MTF also to let aware of your feedback. Also we will be charging only .04% per day and not .05% as you mentioned and definitely you canāt compare us with bank rates.
MTF could have been 12.5% p.a.
If you have enough cash, you can convert your MTF position into a delivery position.
Requirement for the client to enter OTP to pledge is going away effective October 14, 2024. Refer circular
We will take this feedback
We donāt intend to square off positions unless thereās margin shortfall or a complex corporate action (de-merger etc). FYI, most brokers tend to close positions for splits and bonuses too.
hmm, weāll take this as feedback
Same, margin is charged basis what was applicable on the day of trade. However, if the stock price falls that triggers an MTM call, and if the client isnāt able to fulfill, the positions will be squared off.
Weāre charging 0.04% day.
Canāt this be set to 12.5% by any chance? Zerodha already has a great NBFC and the cost of funds for Zerodha Capital is lower than most other NBFCs. I am just asking if this is the final rate that the management team has decided to go for? @VenuMadhav If you could throw some light on this, Iāll be glad. Thanks.
@VenuMadhav you are largest - you can reduced the intrest rate to 12 % like that - if you increase then no point to have this facility - any lose for clients they need to bear both - but you dont have any loss
please look at the client level also - without client their is no broker
Thanks for your feedback. One can have endless debates about how much one should charge, even in the above threads, thereās request for 12.5, 12 If it was 12.5, questions would be why canāt it be 11.5, in line with what our NBFC charges as rate of interest for loans availed. The comparisons can be endless.
We believe what weāre charging is fair, and reflects the value of the service we provide.
To add to what @VenuMadhav said, it is charging enough to cover the overnight risk. With LAS (Loan against security), the haircut is 50%; that is, you can borrow only 50k for pledging stock worth 1lk. The risk is lower, and hence, we charge around 11.5%. In the case of MTF, you can trade something worth Rs 1lk with as low as Rs 20k in your account. The risk for us is much higher hence we charge ~15.7% (0.04% compounded daily).
Appreciate your detailed replies and clarification. Thanks!
Soon traders will demand zero interest under Pradhaan Mantri MTF yojna
Thanks @VenuMadhav for quick response. Converting to delivery is an option but I am suggesting an option to reduce the trigger price of the stock by adding some amount to that particular trade. This option is generally used by the investors, where they donāt want to convert to delivery but donāt want their holding to be squared off because of a sudden down move and investor expects the stock to move up in few days.
I am attaching a snapshot of ICICI direct open position for your reference. Observe that
This way every transaction can be managed individually and hence reduce the MTM calls from the broker as people can manage it otherwise one has to manage it on the portfolio level.
Pardon me if I have quoted in a wrong way , I am new to the platform.
Weāve built our system the same way.
Ok, I now understand what youāre asking. You want the ability to partially pay for the MTF purchase, thereby reducing the funded value. This is not something weāve accommodated for in the current system. We will have to build a system that allows users to voluntarily apportion a portion of their free funds towards MTF segment to cover for a part of the funded amount. I donāt know if thereās a real world use case for this. We will evaluate and see if this needs to be provided.
@VenuMadhav Yes, this is a real world use-case. I have built my entire portfolio this way, all thanks to ICICIdirect. I have now been doing this for 5+ years.
Not everything is black and white because investors want full control over their funds utilisation so there is a lot of room for customisation.
Lets say I had a big day today (trading) and I want to reduce my funds borrowed in my long term portfolio. How do I do that in Zerodha? Then of course, I will need a part payment flexible option.
Thank you for your response. But there is a use case which is to manage the market volatility and avoiding MTM calls. Also we should consider investors who want to have a full control of every purchase under MTF not just the whole MTF combined as basket.
With Zerodha now people have expectations that itās system would be better than others and I am afraid we are behind other existing brokers in case of MTF.
I also understand that this is something which Zerodha can not implement immediately but whenever you evaluate this please consider reverse as well i.e when the Stock went down I added extra cash to the particular MTF transaction to avoid Square-off now when the stock came up I should be able to withdraw the cash added thereby again increasing the funded value by broker and increasing the trigger value at which the the stock would be squared-off. This helps in freeing up the cash for other purchases.
This is not present with any of the brokers and Zerodha can be the first one to introduce this feature.
It would be good if we can have some educational blogs,videos,playlist on this topic for new traders, before rolling out the featuresā¦
Funny to see you asking for 12.5 % on another thread and asking me to chose a different broker for the same comment . Be happy with 15.7 % now !