New Delhi, March 22 -- India's margin trading market has hit Rs.1 trillion, highlighting a surge in leveraged stock buying even as risks loom large for retail investors.

Data from the National Stock Exchange shows total outstanding funded stock positions across brokers have surpassed Rs.1 trillion, reflecting how aggressively investors have embraced leveraged stock buying in recent years.

The pitch is tempting: put in a fraction of the money, borrow the rest from your broker, and take a larger position in a stock you are bullish on. But the mechanics of margin trading facilities (MTF) carry risks that are easy to underestimate.

MTF lets investors buy stocks by paying only part of the total transaction value upfront. Brokers fund the re...