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Juvina Maggie made post

What is meant by haircut when I give my shares as margin? What happens to my dividends and bonus when the shares are given as margin?

Answer
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Sam Eswaran answered.
2 years ago


The haircut is the amount by which the value of your stock is deducted for the purposes of calculating the exact value of collateral holdings/limits. This haircut is often quoted in percentage terms (as a % of the market value). If the Value of holdings is Rs. 5,00,000 and the haircut percentage applicable is 50%, then the value of the collateral/margins available for trading purposes shall be Rs. 5,00,000 – Rs. 2,50,000 (50% of Rs. 5,00,000) = Rs. 2,50,000.
Remember, that there is nothing like a general haircut for your portfolio. The haircut is different for different securities and is based on the volatility of the security, the liquidity of the security amongst other factors. Regarding your corporate actions, nothing will be affected and they will all come to you. Your broker has a lien on your shares only in the event you are not able to pay the margins for the losses that you have incurred in cash.