MTF Income Another Source To Earn Higher Revenue For Stock brokers And Franchise

Introduction of  MTF

Margin Trading Facility, or MTF in market terms, is a unique permission given to buyers of shares and securities that allows them to buy for more than they can afford to pay in cash. Here’s how it works. Under the margin trading facility, or MTF, you only pay a percentage of the whole transaction value, known as the margin, thus the name.

One of the most significant advantages of margin trading is the ability to give cash or stock as collateral margin. Of course, your shares’ worth will only be assessed after the haircut. Aside from that, there are further benefits to margin trading. For example, you get leverage, and we will discuss these margin trading advantages several times throughout this section.

Here’s how it works. e.g. If you can afford to invest Rs.2 lakh, the broker will offer to finance you an additional Rs.4 lakh, allowing you to acquire shares worth Rs.6 lakhs with only Rs.2 lakh. That is a significant advantage, however you must pay interest(12-18%) on the loan amount utilized.

Margin Trading Facility Works

Benefits of Margin Trading Facility

• Margin funding allows investors to invest more money, increasing their power to purchase and sell in the market.
• It is an economical choice for investors looking for short-term borrowing alternatives.
• Investors may act quickly on trading opportunities without having to wait for cash to become available.
• Margin funding enables investors to diversify their portfolios by increasing their investment options beyond their present budgetary constraints.
• Margin finance enables fast access to cash, increasing liquidity for investors to capitalize on developing opportunities or meet urgent financial demands.

How MTF will benefit Franchisee Owners

• If you are a franchisee partner then you can leverage your clients or give option to them to leverage so that they can trade with more margin.
• If margin increases definitely the trading power of clients increases which in turn gives franchise owner to create more revenue
• This facility will help to capture those clients who have low margin but want to trade for higher value stocks, and shares so this facility will give them a option.
• In the interest value which is decided by the broker will also be shared some amount with the franchise owners.

Conclusion-

This facility will give a chance to increase your existing clients to trade more and increases revenue. So aware your clients about the facility and earn more revenue.

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