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haircut

- 4 dictionary results

hair⋅cut

[hair-kuht]
–noun
1. an act or instance of cutting the hair.
2. the style in which the hair is cut and worn, esp. men's hair.

Origin:
1895–1900; hair + cut


haircutter, noun
haircutting, noun, adjective
hair·cut   (hâr'kŭt')   
n.  
  1. The act or an instance of cutting the hair.
  2. A style in which hair is cut.
hair'cut'ter n., hair'cut'ting adj. & n.

Haircut

1. The difference between prices at which a market maker can buy and sell a security.

2. The percentage by which an asset's market value is reduced for the purpose of calculating capital requirement, margin, and collateral levels.

Investopedia Commentary

1. The term haircut comes from the fact that market makers can trade at such a thin spread.

2. When they are used as collateral, securities will generally be devalued since a cushion is required by the lending parties in case the market value falls.

Related Links

Electronic Trading Tutorial

See also: Market Maker

Language Translation for : haircut
Spanish: corte de pelo,
German: der Haarschnitt,
Japanese: 散髪

haircut

A deduction in the market value of securities being held by brokerage and investment banking firms as part of net worth for calculating their net capital. The size of a haircut varies with the particular type of security held.

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