How much funding will I receive through MTF at Jainam?

How much funding will I receive through MTF at Jainam?

  • The client needs to provide a portion of the total cost in the form of the margin. The remaining amount is funded by Jainam and interest is charged on this amount.

  • This initial margin requirement is calculated based on the Value at Risk (Var) and the Exposure Limit Margin (ELM) for that particular stock.
    1. For stocks having F&O contracts : The margin required is calculated as VaR + 3*ELM.
    2. For non-F&O stocks: Margin is calculated as VaR + 5*ELM.

FOR EXAMPLE:
Let’s say you want to buy a stock ABC and ABC is also having F&O contracts.

Buy price of ABC   = ₹500 
VaR of ABC     = 12%
ELM   = 6%

Then, 
The margin requirement will be 
= VaR + 3 times of ELM
= 12% + 3*6% 
= 30%.
= ₹500 * 30%
= ₹ 150
Funding by Jainam = Buy price of the scrip – Initial margin required by the client 
 = ₹ 500 –150
 = ₹ 350
Leverage by Jainam here
= 100/Margin requirement in %
= 100/30
=3.33 times
= Buy value/initial margin amt.
= ₹500 /₹ 150

Thus, the funding that you will receive from Jainam under MTF depends on the VaR and the ELM for that particular stock.