Hello,
As we know that Interest on borrowed amount for MTF is calculated on daily basis and posted to the ledger on weekly basis.
I have a query - Is there any provision by which the payment of interest part is deferred to the time of closing the MTF position in case when I don’t want to pay interest part weekly ?
One possible solution can be - the negative ledger balance is added to the borrowed amount on weekly basis. Is it possible ?
Thanks,
Saurabh
Hi @saurabhkumarbansal Thanks for the note. Well, as a trading platform we have to offer standard rules for everyone, exception for one can’t be made.
That said, it is more important to understand that these are leveraged positions and exchanges / regulators are very particular about margins - we have to report them multiple times in a day, week and month. There are many users who hold MTF positions for a very long time, in such cases even if the client is not providing the funds - as a broking platform we bring in those funds and there are costs associated with these. Will increase the leverage in the system + interest rates will go up.
We started with ~16% interest rates, and now as we had a strong balance sheet - we were able to bring this down to 12.49%. Making changes to how margins / leverages are managed having implications on many other things for a broking business.
Hello @PravinJ
Thanks for the response though I did not get the answer to my question clearly.
Your response indicates that it is indeed possible to defer the interest payment till the time when MTF position is closed. Is my understanding correct ? If yes, please let me know how much extra interest do I know to pay in such a case of delayed interest payment.
Thanks,
Saurabh
Hi @saurabhkumarbansal Nope, it is not possible to do that. We do have individual plans for MTF.
Hello @PravinJ
How do I know about these individual plans.
Do you have any post/article/document for this ? Please share.
Saurabh
@saurabhkumarbansal , @PravinJ means that we do NOT have individual plans .