Easy Debit Funding with MarginPlus!
Margin Trading Facility (MTF) or Debit Funding is offered by 5paisa to all MarginPlus customers. MTF allows you to easily purchase stocks on margin using the leverage of up to 5x. Further, you can hold onto these positions for up to 90 days, potentially multiplying your gains!
What is Debit Funding?
The Margin Trading Facility (MTF) or Debit Funding offered by 5paisa enables you to use leverage while buying stocks for delivery, i.e. with MTF, you can buy stocks by paying only a fraction of their price! Using MTF significantly increases your buying power, allowing you to make the most out of all your trading ideas.
For Example- you can buy 50 Qty of XYZ stock at Rs.100, with just Rs.1000 using our Funding Facility. Now if the stock moves up by 10% over the next month, you could have made a gross profit of Rs.500. An interest of 0.05% per day would be charged for the month* on the funded amount of Rs.4000, i.e., Rs. 4000*0.05%*30= Rs.60†. So, in this scenario your net profit comes out to be Rs.500- Rs.60 = Rs.440. This is effectively 4.4x of what you could’ve earned without Funding!
XYZ stock bought at Rs.100
| With Funding
| Without Funding
|
Amount invested by you
| Rs.1000
| Rs.1000
|
Total Investment value
| Rs.5000
| Rs.1000
|
Gross profit (10% increase)
| Rs.500
| Rs.100
|
Interest charged (30 days)
(0.05% per day)
| Rs.60 (Rs. 4000*0.05%*30)
| Rs.0
|
Net Profit
| Rs.440
| Rs.100
|
Net Returns
| 44%
| 10%
|
*The interest rate will be determined based on your ‘Networth at the start of the month’. If your Networth is above 1Cr. then 0.045% per day, between 5L. and 1Cr. then 0.05%, and below 5L. then 0.06%
The interest will only be charged after the T+2 date, where T is the date on which the stocks were purchased. Interest will be charged for the period your account stays in debit, regardless of whether you’ve pledged your stocks or not.
The process to avail Debit Funding facility:-
Availing of the Debit Funding Facility is pretty simple. Once you purchase the Debit Funding (MTF) approved stocks (Click Here to see Debit Funding (MTF) approved script list), you can pledge those stocks within 24 hours of Purchase. If you forget then the positions will get squared off within 7 days. Funding is only done on debit created from the purchase of shares. Debit arising out of trading loss or derivative is not funded.
1. Click on Debit funding in the Net Available Margin Section of your 5paisa app
2. Copy your PAN number from the pop-up and click on ‘OKAY
3. Enter your PAN number on the CDSL website
4. Enter the OTP you receive on the CDSL website
