Understanding MTF Margin Calculation

To better understand the Margin Trade Funding (MTF) process, let's consider the following scenario:

• a. MTF Cash Collateral: ₹826,262
• b. MTF Stock Collateral (after haircut valuation based on the previous day's closing price): ₹4,813,142
• c. Margin Required on Funds Utilized (funded stock position): ₹3,209,245
• d. Other Losses (booked losses and charges): ₹196,273
• e. Mark-to-Market Loss: ₹2,171,604
• f. Accrued Interest: ₹17,378

Margin Available Calculation: The margin available for taking further MTF positions is calculated using the following formula:

Margin Available = Cash Collateral + Stock Collateral - Margin Required - Other Losses - Mark-to-Market Loss - Accrued Interest

Using the given values: ₹826,262 + ₹4,813,142 - ₹3,209,245 - ₹196,273 - ₹2,171,604 - ₹17,378 = ₹44,904 Credit. This amount, ₹44,904, represents the available margin for taking additional MTF positions.

Maximum MTF Purchase Capacity: Since we fund a maximum of 50% of the purchase value, you can buy additional stocks worth up to:

Maximum Purchase Value = ₹44,904 x 2 = ₹89,808

MTF Statement Example: The Margin section of your MTF statement (emailed to you) would reflect this as follows:

• MTF Cash Collateral: ₹826,262
• MTF Stock Collateral: ₹4,813,142
• Margin Required: ₹3,209,245
• Other Losses: ₹196,273
• Mark-to-Market Loss: ₹2,171,604
• Accrued Interest: ₹17,378
• Available Margin: ₹44,904
• Maximum Purchase Value: ₹89,808

The Margin section of the MTF statement emailed will look as below