Low on Funds? Trade Now, Pay Later: Zerodha's MTF Launched

Zerodha’s CEO, Nithin Kamath, has announced the introduction of a Margin Trading Facility (MTF) via a LinkedIn post. While acknowledging that market conditions may not be ideal for such an announcement, Kamath explained that MTF allows investors to purchase stocks for delivery using borrowed funds from Zerodha.

Kamath shared that he had reservations about launching this service for quite some time. He highlighted a significant concern: investors who engage in delivery-based trading often overlook the cost implications of borrowing funds. Additionally, there’s always a possibility that market movements might go against the investor, potentially resulting in larger financial losses.

Despite these concerns, Kamath noted a shift in the market’s approach to MTF over the past few years. "In the last three to four years, MTF has seen remarkable growth, with most market players introducing this feature," he stated. He further mentioned that customer demand for the service had grown significantly, making it a strategic decision for Zerodha to introduce MTF. Ignoring this demand, he said, would not have been a sound business move.

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