MTF book continues to grow in June but some Nifty names see big unwinding

The Margin Trading Facility continue to grow in the month of June, as it hit another record level of ₹1.35 lakh crore at the end of the month, a growth of 6.9% from the ₹1.26 lakh crore size at the end of May.

What Is The Margin Trading Facility?

A Margin Trading Facility (MTF) is where a trader buys stocks by paying only a fraction of the amount, and the rest of the purchase is funded by a broker. An interest is paid on the sum borrowed. The MTF facility allows traders to buy more stock with limited cash as the rest is borrowed.However, the shares purchased are held as collateral by the broker until the borrowed sum is repaid. In case the stock price goes up, it increases the returns. However, the same is amplified when the stock price falls.In case of the stock falling, the broker could ask for additional funds and failure to arrange for the same could prompt the broker to sell the shares and get the lent money back.

Which Are The Most Traded MTF Names In June?

Reliance Industries ended June as the most leveraged stock on the MTF book, as per data available on the National Stock Exchange (NSE).As of June 30, Reliance Industries' positions on the MTF book stood at ₹2,206 crore, a growth of 41% from last month. The biggest rise among the top five stocks came in Infosys, at 56%, while HDFC Bank slipped from the top spot in May to No. 3, as its positions declined by 20%.

Which Stocks Saw The Biggest Increase In MTF Positions In June?

Persistent Systems, Vedanta, BSE, Tata Steel and Tata Motors PV are the five stocks with the biggest increase in MTF positions in the month of June. In fact, Persistent Systems had featured among the stocks whose positions had declined in the month of May.

However, at the end of June, Persistent's positions rose from ₹221 crore to ₹543 crore, a jump of 146% month-on-month. The other stocks on the list also saw their positions grow between 57% to as high as 88%.

Which Stocks Saw The Biggest Decline In MTF Positions In June?

Major Nifty 50 names have seen unwinding of their positions in the MTF book, with the drop ranging from 35% to 43% compared to the month of May.

The index constituents include the likes of State Bank of India, which was among the top names in May, IndiGo, Shriram Finance, Trent, and Bajaj Finance.