Haircut

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Haircut

The margin or difference between the actual market value of a security and the value assessed by the lending side of a transaction.

Haircut

1. The reduction of value to securities used as collateral in a margin loan. That is, when one places securities as collateral, the brokerage making the loan treats them as being worth less than they actually are, so as to give itself a cushion in case its market price decreases.

2. The bid-ask spread at which a market maker buys and sells securities. It is called a haircut because it is a thin spread.

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.

Haircut.

A haircut, in the financial industry, is a percentage discount that's applied informally to the market value of a stock or the face value of a bond in an attempt to account for the risk of loss that the investment poses.

So, for example, a stock with a market value of $30 may get a haircut of 20%, to $24, when an analyst or money manager tries to anticipate what is likely to happen to the price.

Similarly, when a broker-dealer calculates its net capital to meet the 15:1 ratio of debt to liquid capital permissible under Securities and Exchange Commission (SEC) rules, it typically gives volatile securities in its portfolio a haircut to reduce the potential for being in violation.

The only securities that consistently escape a haircut are US government bonds because they are considered free of default risk.

References in periodicals archive ?

So dust off your tuxedo and book a hair appointment at Company Haircutters.

FOR KICKS!: Horan after new date for Pedros

Mowgli Haircutters are a successful, hair salon in the heart of affluent Primrose Hill, serving the well- heeled set of music execs, film business people and ladies who lunch.

PICK OF THE BOX: Hair-raising stuff at the salon

THIS WEEK: Sandra Kershaw, 23, went to Exhibition Haircutters in Barrow, Cumbria (01229-433217)

Salon Spy; Fancy going on an M mission? Let us pay for your haircut then report back to HQ. Not a mission impossible, eh?

And I was able to work my way up from brushing up hair on the salon floor, to running Company Haircutters, one of the most successful hairdressers in Belfast.

THE WORST CUT OF ALL SAVED A STYLIST'S LIFE; Hairdresser Alan Boyce's battle with cancer gave him the will to relax yet succeed in business

One of the best haircutters in the city was called in to do the pubic hair," someone leaned over and whispered in my ear.

The best of 1998

Other types of industries that would be subject to the tax are accountants, architects, lawyers, public relation professionals, dry cleaners, florists, cosmotologists, haircutters, even coin-operated laundries.

Washington state Legislature wrestles with ad tax bill

Julie's role is to rouse volunteer haircutters before dawn to schlep out to remote locations to cut hair on behalf of CAF.

Challenged Athletes Foundation to Celebrate Champions and Change Perceptions at the 19th Annual Aspen Medical Products San Diego Triathlon Challenge

Instead, she trained at Maroon Haircutters Salon in Cowbridge in the Vale of V Glamorgan, where the family said staff had been "supportive from the day of Amy's diagnosis" on her 21st birthday in August 2012.

Amy's memory still shines for family and friends

Happy birthday to one of the San Fernando Valley's classiest veteran haircutters -- Carmin Casciano, who turns 100 today.

HARVEY, DANNY ARE PROOF PEOPLE CARE

com, Algoma's Watertower Inn, The Flower Shed, The Flower Jug, First Choice Haircutters and Del Laboratories, Canadian Businesss and Ganong.

Influential women 2003: Northern women honoured for creating wealth, opportunity in the North

Pic unfolds during a 24-hour period in which Calvin (Ice Cube) will decide whether or not to sell the community landmark to a loan shark who wants to turn it into a strip joint, thereby throwing the barbershop's improbably large family of haircutters into the street.

Barbershop

Tenants include Exit Realty, Los Vega Mexican Restaurant, Champions Liquor, Imperial China Cafe, TGF Haircutters, Subway, Ace Cash Express, Kim's Nails, Postal Plus and Ken Stewart Nationwide.