MTF: Margin Trading Funding in Zerodha

For more than a year now, Zerodha has been saying that they will bring MTF but haven’t clarified properly yet.

We retail traders are not getting the profit that we should get through MTF, because big brokers providing MTF service like ICICI, Kotak eat more than half of our profit in brokerage.
And the brokers who take fixed brokerage on delivery, charge more interest on MTF than necessary. Like from 24% to 30%.

There is a broker in the name of flattrade, he charges 12% interest on MTF and takes fixed brokerage of Rs.10. This is a very good plan but this broker seems too small and a bit unreliable. It has also probably changed its name and there are probably many complaints against it.

From Zerodha, we need such a plan that does not eat the profit of MTF to the retail trader in the name of brokerage or interest.

Dear @nithin , @siva-reddy , @VenuMadhav , Can this happen?

Yeah, it is on our list of things to do. Can’t really give a date on this.

Dear nitin
It has been almost 2 years now
Are you bringing the mtf facility anytime soon?

Hi @AryanKB, Nithin has discussed about this here:

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If anytime in the future Zerodha starts MTF, at the lowest rate of interest as compared to its competitor, I think there won’t be any competition left in the market.

If Zerodha will not offer MTF for long term investors, then some of the cheapest MTF giving brokers will overtake Zerodha.
Zerodha will certainly lose the top.

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It contradicts the fact that even though there are other platforms offering the MTF, none of them have even overlapped Zerodha. MTF is limited to one year of holding, as far as I know. It could be on the to-do list of Zerodha to introduce MTF to fellow traders.

Mstock allows you to hold MTF till the time you want and there is no capping on the period of holding, I believe presently it is the biggest and cheapest player in MTF

Can someone explain what this MTF is?

Borrowing money at a predefined interest rate, or interest per x thousand, lakh, or crore, depending on the platform you use for investing.
MTF Abbreviation is a margin trading facility.

Do you use MTF facility by mStocks ? How much brokerage do they charge ?

They have two plans I believe…1) One-time fee for lifetime free brokerage of around Rs 999 + taxes to be paid separately for Equity delivery and F&O and 2) Nominal brokerage plan like Zerodha.

Their biggest value proposition is MTF, where the interest rate varies from 6.99% to 9.99%, without any upfront subscription charges, no borrowing limit, and no restriction on the holding period…means you can hold the margin used till the time you want.

However, their app and portal is nowhere close to zerodha, the reporting system is poor…and customer support is also not good.

Ppl who understand this fact and ok with managing these hurdles on their own usually continue with Mstock…as the MTF margin facility is the cheapest in the industry… and thus provides higher profitability.

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Any update on this as of 24/04/2024? @ShubhS9 @MohammedFaisal

Hi @varad_mulye ,
This is actively in the works, we’ll roll this out in the next couple of months.

@MohammedFaisal any update on this