Margin Trading Facility on WebNotes

How to convert a CNC position to MTF on Zerodha

Tue, 12 May 2026 00:00:00 +0000

On Zerodha, an existing CNC (delivery) holding can be converted to an MTF position through a conversion feature in the Kite Holdings view. The conversion is effectively a broker-funded buyback of the delivery position: Zerodha credits the funded amount (up to 75% of the current market value) to your trading account, while the shares move into an MTF-pledged state. This releases liquidity from an existing holding without requiring a sale, allowing the investor to use the freed cash for other purposes while retaining exposure to the stock.

How to repay MTF interest and close an MTF position on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Repaying an MTF position on Zerodha involves settling the outstanding funded amount (principal) and any accrued interest, which releases the pledged shares from the MTF lien and converts them back to free CNC delivery holdings. Repayment can be done by cash transfer (keeping the shares) or by selling the MTF shares (using sale proceeds to settle the loan). Understanding both paths, and the timing of daily interest debits, is important for optimising the total cost of MTF positions.

How to take an MTF position on Zerodha

Tue, 12 May 2026 00:00:00 +0000

The Margin Trading Facility on Zerodha allows investors to purchase eligible equity shares at a fraction of the total purchase price, with the balance funded by Zerodha as a short-term loan. The purchased shares serve as collateral for the loan and are held in the investor’s CDSL demat account in a pledged state. Interest accrues daily on the funded (borrowed) amount. MTF is a delivery product; shares are credited to the demat account after T+1 settlement and can be held for extended periods, subject to margin maintenance requirements.

MTF interest and brokerage at Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

The Margin Trading Facility (MTF) at Zerodha allows eligible clients to purchase equity shares by paying only a portion of the total purchase value (the margin amount), with Zerodha funding the remainder. The funded portion is essentially a loan from the broker, and interest accrues on it at a daily rate of approximately 0.04 percent per day (approximately 14.6 percent per annum as of mid-2026). Normal brokerage also applies on MTF trades at the same rates as for delivery trades (zero brokerage on equity delivery), and all statutory levies – STT, exchange charges, stamp duty, GST, and the SEBI turnover fee – apply in full.

MTF on Zerodha

Mon, 11 May 2026 00:00:00 +0000

The Margin Trading Facility (MTF) on Zerodha allows investors to buy equity shares in the cash segment using leverage, meaning the investor contributes a portion of the trade value (the margin) and borrows the remainder from Zerodha. Unlike intraday MIS positions that must be squared off by the end of the trading session, MTF positions can be held for multiple days, weeks, or months while interest accrues on the funded amount. MTF is governed by SEBI’s Margin Trading Facility Guidelines and is available on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

MTF product code on Zerodha

Mon, 11 May 2026 00:00:00 +0000

MTF (Margin Trading Facility) is a product code on Kite, Zerodha’s trading platform, that enables investors to buy eligible equity shares by paying only a portion of the total transaction value upfront. The remainder is funded by Zerodha as a loan, on which interest accrues daily. The purchased shares serve as collateral for the loan and are held in the investor’s demat account in a pledged state until the MTF position is fully paid for or sold.

Zerodha Capital (NBFC)

Mon, 11 May 2026 00:00:00 +0000

Zerodha Capital Private Limited is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India and a wholly owned subsidiary within the Zerodha group. Its principal business is the provision of margin trading facility (MTF) funding to eligible clients of Zerodha Broking Limited, enabling them to purchase listed securities on margin. The company is headquartered in Bengaluru, Karnataka.

As the group’s regulated lending arm, Zerodha Capital holds the NBFC registration necessary to lend funds to retail clients against securities collateral. Interest income from MTF lending, alongside brokerage revenue at the parent broker, constitutes one of the primary revenue streams of the Zerodha group. The company does not accept public deposits and does not conduct retail lending outside the securities financing context.