Sometimes, you want to buy more shares but don’t have enough money. What do you do? That’s where Pay Later (MTF) comes in. It’s also called Margin Trading Facility. It helps you buy shares now and pay later.
Motilal Oswal, a trusted stock broker in India, gives you this smart option. You can use small money and still take big trades. But remember, it’s not free money. You need to return it later. So, it’s useful but needs care.
What is Pay Later (MTF)? Explained Simply
Pay Later (MTF) means you pay only a small part of the total share price. The rest is given by Motilal Oswal. You get to buy more shares than you normally could.
This way, you can make bigger profits. But it also means bigger risk if share prices fall. So, it’s good for short-term traders who understand the market. It is not a loan. It’s a trading help to grow your money faster.
Easy Steps to Use Pay Later (MTF) on Motilal Oswal
Here’s how to start using Pay Later (MTF) with Motilal Oswal:
1. Open a trading and demat account with Motilal Oswal
2. Get Auto activated MTF account with Motilal Oswal
3. Choose shares that are allowed for MTF
4. Pay a small margin
5. Rest of the money is funded by Motilal Oswal
6. Keep an eye on your shares. You can hold for as long as you want.
7. Sell anytime or add money if needed to maintain the margin
So simple and quick to start!
What is a Pay Later (MTF) Pledge?
When you buy shares through Pay Later, those shares are kept as a “pledge”. That means you still own them, but they are kept as security with Motilal Oswal.
You can’t sell them freely until you close your MTF position. If you don’t maintain the margin, Motilal Oswal can sell your pledged shares. This is done to protect both you and them.
Important Points to Remember Before Using Pay Later
● You need to pay interest daily
● Always track your stocks. Prices can go up or down
● Add more margin if needed to avoid auto-sell
● Check the list of approved stocks before using MT
● MTF is good for experienced traders, not beginners
● Don’t over-use it just because you can borrow easily
Use it only if you understand how the market works.
Benefits of Pay Later (MTF)
● Start trading
● Buy more with less – you can trade in bigger amounts
● Hold as long as you want
● Helps you grow your returns faster
● No need to arrange full money instantly
● Motilal Oswal gives you easy tracking tools
● Fast activation – no extra paperwork
MTF is like a booster for your trading journey!
Risks You Must Know
● If share prices fall, you can lose more than your own money
● You have to pay daily interest, even on holidays
● Your pledged shares may be sold if you don’t add money on time
● Market moves fast – things can change in one day
● It’s risky for new users who don’t understand stock trading
● Sometimes margin requirement increases suddenly
So, use it smartly. Don’t trade just for fun.
Best Practices to Stay Safe While Using MTF
● Only use MTF when you understand the stock
● Always keep extra cash in your account
● Don’t use full limit – leave some buffer
● Check your margin status daily
● Choose only good quality, stable stocks
● Plan your entry and exit before buying
● Learn first, trade later
Who Can Use It? Eligibility and Charges
To use Pay Later (MTF) with Motilal Oswal, you must:
● Have a Motilal Oswal trading account
● Be KYC compliant
● Accept the MTF agreement online
● Choose from a list of approved shares
Charges include:
● Daily interest on the borrowed margin amount
● Pledge charges, as per Motilal Oswal’s fixed schedule
● No hidden costs – all charges are shown clearly before you trade All charges are shared with you clearly before trading.