Query on usage of MTF

Investing 💰
1

Say I have a stock x in my holdings which is eligible for MTF. I want to buy this stock now using MTF but I don’t have cash balance in my account. If I sell this stock and immediately buy it again using MTF ( more quantity this time than what I sold ), will that work? Would I have to add cash from bank account to my trading account in order to avoid interest or the cash I received by selling my existing holding would suffice?

2

Hey @explrorer ,

You cannot buy the same stock in MTF on day of selling that stock from your portfolio. You will need to buy the stock on the next day and can use the cash from the sale proceeds of the stock you sold. Please read this for more details.

Thanks,
Pranita
Product @ Dhan

3

Thanks for the reply @Pranita . I have a follow up question. As you said I can not buy the same stock via MTF using cash ( i.e. early pay-in) received by selling the stock.

But let’s say I have stock A and stock B and and both are eligible for MTF. Can I sell both of them now and buy them again using MTF. Because it can be considered that stock A on MTF has been bought using cash received via selling stock B and stock B on MTF has been bought using cash received via selling stock A

4

Hey @explrorer ,

No, that cannot be done. For the exchange they will see net stock level obligation at the end of the day.

Thanks,
Pranita
Product @ Dhan

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