Pledging Stocks as Collateral for MTF

Yes, you can use your existing stocks as collateral under Margin Trade Funding (MTF) by pledging them. This is referred to as stock collateral.

Stocks Accepted as Collateral

• Eligible Stocks: All approved stocks, as specified by the Exchange from time to time, are accepted as collateral. Check the list here. 
• Collateral Limit After Haircut: The limit you receive as collateral is calculated after applying a haircut to the stock. The haircut percentage is determined by the Exchange.
  • Example: If the haircut for Stock A is 20% (as prescribed by the NSE), and you pledge stocks worth ₹1 lakh, a 20% haircut will be applied. This means ₹20,000 will be deducted, and the remaining ₹80,000 will be added to your collateral limit.
• Subject to Change: The stocks eligible for collateral and the haircut percentages are subject to change based on Exchange regulations.

Using your pledged stocks as collateral allows you to enhance your purchasing power and leverage under MTF, enabling you to trade more effectively.