Introduction

Imagine discovering a golden opportunity in the Indian stock market - a large tech company such as Infosys jumps after terrific earnings. But the funds you could typically use are all tied up in long-term stock bets, and you would be giving up possible future gains by selling that right now. Very frustrating, right? This is where the Pay Later services come in, with a margin trading facility (MTF) that enhances your buying power without emptying your wallet. Designed for sharp Indian traders, Pay Later lets you act fast in the fast-moving NSE or BSE markets, turning limited capital into significant opportunities.

What Is Pay Later (MTF)? Your Key to Leverage

Motilal Oswal's Pay Later is a margin trading facility that lets you buy stocks by paying just a fraction, often as low as 20% of the trade value upfront. The broker finances the rest at a competitive interest of 0.053%/day (about 19.5% annually) on the amount borrowed. Unlike a traditional loan, MTF trading has the borrowed shares as collateral, adding a layer of security to the structure. To activate Pay Later is straightforward. MTF is activated after you digitally sign the MTF agreement with your broker. It is not auto-enabled just by opening an account. Accept the digital agreement, select your stock from an approved list, and trade. With MTF, you can be given leverage of up to 5X the security value (considering stock volatility and SEBI guidelines), meaning that your ₹1 lakh would be able to take a position worth ₹5 lakh and give you exposure to many opportunities across India's diverse equity markets.

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Why Pay Later is attractive to active Indian market traders

For those in active trading who follow India's markets and operate by triggers or announcements domestically (e.g. budget announcements) or globally that lead to immediate interest from markets, the emergence of MTF is significant. The cash-only barrier is removed, allowing traders to amplify their exposure and trade opportunities without liquidating their core holdings. You can hold positions beyond a day, but interest accrues daily, and brokers may set maximum holding limits. So, on occasion, when you get a breakout signal to the upside, you can conduct your technical analysis and go long while sitting on the MTF position up to a stipulated time promised by your broker. You could hold these trades overnight or even longer without rushing to close the position if you feel the market still wishes to continue the trend. This certainly gives active traders the flexibility of trading and the opportunity to catch extended short-term trends. Whether taking advantage of mid-cap rallies in sectors like renewables or looking to buy pharma stocks as policies are unveiled, this margin trading facility allows you to act decisively. If you are already closely following Nifty futures and sectoral indices, Pay Later ensures a fund shortage never holds you back.

How Pay Later Enhances Your Trades

Imagine one of the fundamentally strong stocks you own, like TCS, suddenly drops 4% in value due to global market anxiety. You, however, see this as a buying opportunity because you plan and expect the stock to recover quickly. Here, you pay ₹20,000 through the Pay Later feature, while the broker funds the rest to cover a ₹1 lakh position in TCS. Later, when the stock recovers, say it goes up 5%, starting from when you bought it, you have made a significant return, and since your interest cost is so low, you effectively maximise your gains without changing the overall mix in your portfolio.

Is Pay Later for You?

If you're already doing market research regularly, minimising your loss with stop-losses, and understand leverage, Pay Later is best suited. Pay Later is great for when stock prices dip and you want to capitalise, or within a shorter time frame, when trading/stock prices exhibit price fluctuations and volatility is prevalent in the Indian markets. Pay Later is not for everyone; if the stock you are looking at drops significantly, you may be put under margin calls to add or run the risk of being squared off. Interest is accumulated daily with longer holding times, and losses on leverage are amplified.

It is important to understand your expectations of MTF (Pay Later) and if they fit within your existing risk tolerance, investing mindset, and objectives.

Conclusion

In the ever-changing markets of India, timing is everything. Motilal Oswal offers Pay Later (MTF) to allow you to take trading profits more often and to let the longer-term investments you have liquidated work for you in the background. With Pay Later, you have access to leverage up to 5X, good tools for monitoring your trades and costs, and a well-designed app from which you can trade, which represents an excellent tool to work with if you are a disciplined trader. However, remember that when you use leverage, there is more risk. Use it wisely, keep current with news & media, and know when to operate. At the same time, the prices of stocks fluctuate during periods of volatility, and we have good, accurate strategies that work for you. Now, are you prepared to make bigger trades? Open a Motilal Oswal account, and let Pay Later drive your transactions.

Disclaimer: Investments in securities are subject to market risks. Read all related documents carefully before investing.

Further reads: What is Pay Later (MTF)? - Know it the easy way