#Zerodha #MTF #NithinKamath #MarginTrading #StockMarketIndia #RetailInvesting #LeverageTrading #EquityMarkets #TradingStrategy #FinancialMarkets #InvestingWisely
Bengaluru: Discount brokerage giant Zerodha has achieved a significant milestone in the competitive stockbroking landscape, with its Margin Trading Facility (MTF) capturing a 5% market share within just eight months of its launch. The update was shared by Nithin Kamath, CEO of Zerodha, on social media platform X (formerly Twitter), underscoring the rapid adoption of this leveraged trading tool among retail investors.
What is MTF?
The Margin Trading Facility allows investors to purchase stocks for delivery without paying the full value upfront, by using borrowed funds from the broker. Traders can leverage up to 80% of the trade value depending on the stock, significantly boosting their purchasing power.
We launched MTF in December 2024, and we've quickly gone from 0 to 5% of the MTF market. I’m not sure whether to be happy or worried. 😬
As of now, the net P&L of all positions taken by traders who have used MTF is positive. pic.twitter.com/yYcZ2oEKtC
— Nithin Kamath (@Nithin0dha) September 2, 2025
For example, with ₹20,000 in margin, a trader could potentially purchase shares worth ₹1,00,000 if the stock qualifies for the maximum leverage. However, these borrowed funds come at a daily interest cost of 0.04%, translating to ₹40 per ₹1 lakh borrowed, which accumulates until the position is closed or squared off.
Zerodha’s Reluctance and Eventual Adoption
Zerodha, known for its conservative approach to risk and focus on investor education, had long resisted offering MTF despite growing popularity across the industry. Nithin Kamath himself had repeatedly cautioned traders about the risks of leveraged trading, where positions funded by borrowed capital can quickly erode profits if stock prices move unfavorably.
However, the growing industry-wide adoption of MTF, coupled with rising contract values in derivatives, eventually led Zerodha to roll out the facility on its flagship trading platform, Kite, in December 2024. Since then, uptake has been robust, reflecting both investor appetite for leverage and Zerodha’s brand trust.
How Zerodha’s MTF Works
To access MTF, users must activate the feature in their trading accounts.
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Accounts with PoA (Power of Attorney) or DDPI (Demat Debit and Pledge Instruction) are enabled instantly.
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Others may take up to 24 hours for activation.
Once live, MTF-enabled orders are clearly marked with an “M” in the portfolio view, ensuring transparency.
Charges include:
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Interest: 0.04% per day on borrowed funds.
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Brokerage: 0.03% or ₹20 per executed order (whichever is lower).
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Pledge charges: ₹30 + GST per ISIN (unpledging is free).
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Square-off charges: ₹50 + GST per order.
Daily interest and margin obligations are displayed in the Console MTF statement, enabling users to track costs and exposures in real-time.
Growing Market Share and Adoption
According to Nithin Kamath, Zerodha’s MTF has already achieved 5% market share in just eight months, a remarkable feat considering the brokerage’s late entry into the segment. This growth highlights the demand among active traders for products that enhance liquidity and flexibility in equity delivery trades.
Kamath also noted that many users are reporting positive returns through disciplined use of MTF, particularly in trending markets where leveraged positions can amplify gains.
Balancing Opportunity with Risk
Despite its rapid adoption, Zerodha continues to emphasize caution. MTF comes with inherent risks:
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Daily Interest Cost: Positions incur continuous borrowing charges, which can erode returns if held for long.
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Volatility Risk: A sharp decline in stock value may trigger margin calls, requiring traders to infuse additional funds or risk forced square-offs.
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Long-Term Unsuitability: While equity delivery trades can be held indefinitely, leveraged trades are better suited for short- to medium-term strategies due to financing costs.
Zerodha’s communications highlight these risks, ensuring traders understand that while MTF can enhance returns, it can also magnify losses.
Industry Context
The rise of MTF adoption mirrors broader trends in India’s retail trading ecosystem:
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Derivative contract values have seen consistent growth, reflecting increased retail participation.
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Margin-based products, once considered high-risk and niche, are becoming mainstream due to technology-driven platforms that simplify access.
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Competing brokerages such as Upstox, Angel One, and ICICI Direct had already integrated MTF as a core offering, putting pressure on Zerodha to respond.
With Zerodha’s entry and quick scaling to 5% market share, the MTF segment is now witnessing heightened competition, driving innovation in cost structures and risk management tools.
The Road Ahead
Zerodha’s cautious-yet-successful foray into MTF demonstrates both the evolving appetite of Indian retail investors and the importance of balancing opportunity with risk.
As markets grow and more retail traders seek sophisticated tools, Zerodha may further refine its MTF offering, potentially integrating AI-driven margin alerts, smarter risk controls, and enhanced educational content to help users make informed decisions.
For now, the message from Kamath is clear: while MTF adoption has been swift and positive, traders must remain mindful of risks. In his words, “Leverage can be a friend in uptrends and a foe in downtrends”—a reminder that discipline remains the most valuable tool in an investor’s arsenal.
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#Zerodha #MTF #NithinKamath #MarginTrading #StockMarketIndia #RetailInvesting #LeverageTrading #EquityMarkets #TradingStrategy #FinancialMarkets #InvestingWisely
