A haircut represents the
percentage deduction from the overall market value of a stock.
For instance, if a client
possesses equity shares valued at Rs. 50,000 in an 'E' category scrip, and the
haircut percentage for this category is 20%, the adjusted holding value can be
computed as follows:
Adjusted Holding Value =
Rs. 50,000 * 20% = Rs. 10,000
Consequently, the amount
allocated for trading against the holding would be:
= Rs. 50,000 - Rs. 10,000
= Rs. 40,000.
Understanding haircuts is
essential for investors to assess the collateral requirements and manage their
trading positions effectively on the 5paisa platform.
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