Angel One extends its Margin Trading Facility (MTF) to 20 new ETFs. Learn how MTF works and its potential risks and rewards.
Angel One is expanding its Margin Trading Facility (MTF), which was previously available only for stocks, to include 20 Exchange-Traded Funds (ETFs). The list of these ETFs includes:
List of 20 ETFs Added
| Sl.No |
Scrip Name |
| 1 |
CPSE ETF |
| 2 |
HDFC GOLD ETF |
| 3 |
ICICI PRUD NIFTY ETF |
| 4 |
ICICI PRUDENTIAL GOLD ETF |
| 5 |
ICICIPRAMC – BHARATIWIN |
| 6 |
ICICIPRAMC – ICICISILVE |
| 7 |
MIRAEAMC – MAM150ETF |
| 8 |
MIRAEAMC – MAN50ETF |
| 9 |
NIP IND ETF BANK BEES |
| 10 |
NIP IND ETF GOLD BEES |
| 11 |
NIP IND ETF IT |
| 12 |
NIP IND ETF JUNIOR BEES |
| 13 |
NIP IND ETF MIDCAP 150 |
| 14 |
NIP IND ETF NIFTY BEES |
| 15 |
NIP IND ETF PSU BANK BEES |
| 16 |
NIPPONAMC – NETFPHARMA |
| 17 |
NIPPONAMC – NETFSILVER |
| 18 |
SBI-ETF GOLD |
| 19 |
SBI-ETF NIFTY 50 |
| 20 |
UTIAMC – UTINIFTETF |
What is MTF (Margin Trading Facility)?
MTF, or Margin Trading Facility, is a service that lets investors buy stocks without paying the full amount upfront. It allows them to trade with borrowed money, giving them more buying power than they would have with just their own funds.
Why MTF for ETFs is Beneficial?
- Diversification: Access to a diversified portfolio with reduced risk of overexposure to individual stocks.
- Affordability: Enables investment in high-value ETFs without paying the full amount upfront.
- Stability: ETFs’ lower volatility makes them a safer choice for margin trading.
- Enhanced Liquidity: Quick access to funds for timely market opportunities and balanced portfolio management.
How Margin Trading Works?
Margin trading involves taking a loan from your broker to buy more shares than you could with your own funds. The broker lends you the money, and the borrowed funds are secured with the shares you purchase. You also have to pay interest on the borrowed amount, which adds to the cost of your investment. While margin trading can increase potential gains, it also has the risk of losses.
Advantages of Margin Trading
- Increased Buying Power: Margin trading boosts your buying power, allowing you to invest in more shares and potentially earn higher profits.
- Leveraging Opportunities: If you see a high-potential investment opportunity, margin trading lets you borrow funds to take advantage of it without waiting to accumulate more capital.
- Short-Selling Opportunities: Margin trading allows you to benefit from falling markets by borrowing shares, selling them at a higher price, and buying them back at a lower price.
- Access to Funds: Margin trading gives you instant access to funds, enabling you to invest in opportunities when they arise.
Risks of Margin Trading
- Increased Losses: While margin trading can increase your profits, it can also amplify your losses. If the value of your investment drops, you may need to add more money to cover the losses.
- Market Volatility: During volatile market conditions, prices can change quickly, which can lead to unexpected losses in margin trading.
- Interest Costs: The broker charges interest on the borrowed funds, which can affect your overall profits. It’s important to factor in these costs when planning your trades.
- Emotion-driven Decisions: Margin trading can be stressful, especially in downturns. Fear or panic may lead to poor decision-making, potentially increasing losses.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
