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Based on the Random House Dictionary, © Random House, Inc. 2009.
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Based on the Random House Dictionary, © Random House, Inc. 2009.
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Link To haircut
The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2009 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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Copyright © 2009 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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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
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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.
Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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Copyright © 2003. Published by Houghton Mifflin.
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Copyright © 2009, Dictionary.com, LLC. All rights reserved.



