What is hair cut in stock trading ...

Question

What is hair cut in stock trading ...

Answer 1

taking a haircut means taking a small loss in value.   for example, i once had a client who had invested in a million dollar policy where he was to receive a million dollars in twenty years.   the issuing insurance company went bankrupt, so the state insurance commission stepped in, assigned the policy to another insurance cmpany, but the guy had to take a haircut on the million dollars and was to receive somehting a little less.

Answer 2

To trim d benefit which has arose due to price above the last closing....

Answer 3

the difference between the market maker and you is the "spread". A haircut would be the excess spread (in the old days the "hidden" spread of the middle market) above and beyond the norm.

In today's lingo a Haircut applies to hidden fees (such as the fees on Mutual funds that don't show up in the prospectus).  

Answer 4

the difference of something is i guess

Answer 5

Haircut

1. The difference between prices at which a market maker can buy and sell a security.