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.

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.


Investment dictionary. . 2012.

Look at other dictionaries:

  • haircut — USA A finance term for a discount or loss. An investor is said to take a haircut on a poor investment that has been sold at a loss. The term is also used when discussing the percentage at which eligible collateral pledged under a trading… …   Law dictionary

  • Haircut — (englisch für: „Haarschnitt“) steht für: einen US amerikanischen Film, siehe Haircut (Film) die britische Band Haircut 100 eine Methode auf Kapitalmärkten zur (drastischen) Herabsetzung des Bondwertes, siehe auch Umschuldung …   Deutsch Wikipedia

  • haircut — (n.) also hair cut, 1887, act of cutting the hair, from HAIR (Cf. hair) + CUT (Cf. cut). As style of wearing the hair, by 1890. The Romans began to cut the hair about A.U.C. 454, when Ticinius Maenas introduced Barbers from Sicily. Then they… …   Etymology dictionary

  • haircut — ► NOUN 1) the style in which someone s hair is cut. 2) an act of cutting someone s hair …   English terms dictionary

  • haircut — [her′kut΄] n. 1. a cutting or clipping of the hair of the head 2. the style in which the hair is cut haircutter n …   English World dictionary

  • haircut — (1) A lender s informal expression for a collateral margin. The amount by which the value of collateral exceeds the loan it secures. Commonly used with repurchase and reverse repurchase agreements informally called repos and reverses. (2) The… …   Financial and business terms

  • haircut — n. 1) to get a haircut 2) to give smb. a haircut 3) a short haircut * * * a short to get a haircut to give smb. a haircut …   Combinatory dictionary

  • haircut — hair|cut [ˈheəkʌt US ˈher ] n 1.) when you have a haircut, someone cuts your hair for you have/get a haircut ▪ I haven t had a haircut for months! ▪ You need a haircut! 2.) the style your hair is cut in ▪ Do you like my new haircut? …   Dictionary of contemporary English

  • Haircut — The margin or difference between the actual market value of a security and the value assessed by the lending side of a transaction ( ie. a repo). The New York Times Financial Glossary * * * haircut hair‧cut [ˈheəkʌt ǁ ˈher ] noun [countable]… …   Financial and business terms

  • haircut — [[t]he͟ə(r)kʌt[/t]] haircuts 1) N COUNT If you have a haircut, someone cuts your hair for you. Your hair is all right; it s just that you need a haircut. 2) N COUNT A haircut is the style in which your hair has been cut. Who s that guy with the… …   English dictionary

  • haircut */ — UK [ˈheə(r)ˌkʌt] / US [ˈherˌkʌt] noun [countable] Word forms haircut : singular haircut plural haircuts 1) an act of cutting someone s hair He was badly dressed and needed a haircut. 2) the style that your hair has been cut in a short stylish… …   English dictionary

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