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Reviewed by CA Nikhil Gupta · Last reviewed 11 October 2026
Enter the shares, the price, your contribution and the broker’s interest rate to see the funding cost and the price at which the trade breaks even.
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A broker margin-trading facility funds part of the security purchase while the investor provides cash or permissible collateral. The cost depends on the funded sum, annual interest, elapsed days, processing and pledge charges. The example uses 200 shares bought at ₹500 with 25% paid upfront: the funded principal is ₹75,000. A 90-day borrowing period at 18% simple annual interest produces a cost before fees and taxes.
To break even economically, the sale proceeds must cover the original security purchase price, accumulated financing interest and explicitly entered charges. The tool divides that sum by quantity to show a unit break-even price. If the share price rises but the funding expense rises faster, the overall position can still lose money. All broker-specific and transaction-specific taxes must be added independently.
The equity-ratio output uses the position’s current market value less the funded balance, divided by market value. The maintenance trigger is a sensitivity exercise using the margin percentage you enter, not a SEBI-mandated liquidation forecast. Exchange and broker rules, haircuts, collateral substitutions, concentration limits, interest compounding and forced-sale mechanics may be different.
SEBI describes the general Margin Trading Facility framework, but does not publish a universal retail MTF loan interest rate. Validate the broker tariff sheet, date-wise funding ledger, funded securities account and pledge arrangement. The instrument-specific margin or broker collateral schedule takes precedence over a generic example.
Before borrowing, calculate your daily rupee cost, emergency cash buffer, position drop that triggers margin risk, expected holding period and ability to meet an additional cash call. Compare financing costs with your risk-adjusted expected return. This is a leveraged trading scenario, not an investment return promise.
Suppose 200 shares are purchased at ₹500 each: purchase notional is ₹1,00,000. The investor pays 25% or ₹25,000 and the broker funds ₹75,000. At an annual simple interest rate of 18% for 90 days, the interest estimate is ₹3,328.77 using an actual/365 basis. Add ₹450 in entered fees. If the share price reaches ₹530, the gross price increase is ₹6,000, leaving approximately ₹2,221.23 before income tax. The break-even sale price is approximately ₹518.89 per share. This illustration deliberately avoids treating the funded purchase value as an unlevered investment.
A maintenance requirement based on the investor’s equity fraction is sensitive to price drops. With ₹75,000 of funded principal and a hypothetical 25% equity maintenance ratio, a simplified trigger market value would be ₹1,00,000, before haircuts, fees, margin credit and broker-specific collateral rules. The calculator does not compute intraday exchange SPAN/VAR requirements or prescribe when the broker must liquidate. Margin calls can occur before an investor expects them, and real collateral rules can change.
Obtain date-wise funded ledger balances, daily interest convention, applicable pledge fees, broker brokerage rate, closing collateral value, haircut percentages and any unpaid charges. Recompute interest using each funding-change date if you added or withdrew securities. Assess whether the investment account, business trading account or tax-return treatment permits the claimed cost. The browser model uses a fixed funded balance, so partial funding changes require separate runs or a more detailed ledger.
Typically funding cost relates to the broker-funded portion; confirm the ledger.
No. It is a simplified scenario based on an entered percentage.
No. The initial model uses simple daily accrual.
No. Fees and carrying interest reduce net return.
Rates and rules were checked against these sources on 11 October 2026. Notifications and standards change; confirm on the official site before you file, book or advise.
Educational working tool. Results follow the scope and assumptions above and the figures you enter; they are not tax, audit, legal or accounting advice. Tax and accounting treatment depends on facts and on the law or standard in force for the relevant period, so verify the official source or consult a professional before you rely on a result.
Background, worked examples and the rules behind these numbers.