In lending, the difference between the value of a loan and the value of the...
The percentage deducted from the value of a security (usually debt) to determine the maximum amount against which it can be used as collateral... more on: Haircut
With respect of an eligible currency, the percentage increase of a negative currency balance or reduction of a positive currency balance and is based on (a) the volatility of the historic foreign exchange movements in the applicable eligible currency determined by CLS Bank and (b) an add-on component.
A securities industry term for the formulas used in the valuation of securities for the purpose of calculating a broker-dealer's net capital. The haircut varies according to the class of a security, its market risk and the time to maturity.
The difference between the actual market value of a security and the value the Bank is willing to loan to collateralize a member's advance.
It refers to the formula used in the valuation of securities in order to calculate a broker-dealer's net capital. The haircut varies according to the class of a security, its market risk and the time to maturity.
a percent reduction required to certain valuation s of assets included in a firm's net capital calculation
Margin or difference between the actual market value of a security and the lending value (value as collateral).
When a lender wants to end a transaction in advance, it often will accept a reduction in principal or interest accrued (i.e., a haircut) in order to be paid out in cash.
The amount by which a lender discounts the actual market value of collateral pledged by a borrower.
Initial margin on a repo transaction. Generally expressed as a percentage of the market price.
The difference between the market value of a mortgage and the amount of money a lender will advance against it.
Another name for the discounting of collateral given to the London Clearing House(LCH) to cover initial margin payments. This means that the value given to the collateral by LCH will be less than its current market value, the difference between the two sums being the haircut. This protects the clearing house by taking into account the lesser value that it is likely to get in the event of a forced sale of the collateral to meet losses caused by a clearing member default.
the difference between the market value of a security and its collateral value. The haircut is intended to protect a lender of funds or securities from losses owing to declines in collateral values.
The margin or difference between the actual market value of a security and the value assessed by the lending side of a transaction).
(1) In determining whether assets meet capital requirements, a percentage reduction in the stated value of assets. (2) In computing the worth of assets deposited as collateral or margin, a reduction from market value.
Industry term for the valuation of securities used to calculate a broker/dealer's net capital. The haircut will change depending on the class of a security, its market risk, and the time to maturity. The haircut may fluctuate from 0% to 30% (common for equity securities) to 100% for fail positions (securities with past due delivery) that have prospect of settlement. See: Equity; Fail Position; Maturity Date; Risk
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.
In computing the value of assets for purposes of capital, segregation, or margin requirements, a percentage reduction from the stated value (e.g., book value or market value) to account for possible declines in value that may occur before assets can be liquidated.
In finance, a haircut is a percentage that is subtracted from the market value of the assets that are being used as collateral. The size of the haircut reflects the perceived riskiness associated with the assets.
