Dp Haircut

Discussion in 'Brokers & Trading Platforms' started by doctorrahul, Feb 8, 2008.

  1. doctorrahul

    doctorrahul Member

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    I have sharekhan online trading and demat account.
    my DP balance shows shares before DP Haircut and shares after DP Haircut.
    what is this DP HAIRCUT ?
    Please explain.
     
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  2. AmoghG

    AmoghG Member

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    Seconded. I also want to know about this.
     
  3. doctorrahul

    doctorrahul Member

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    Thanx for the support.
    but how come nobody knows this DP HAIRCUT BUSINESS ? :(
     
  4. SMART_Trader

    SMART_Trader Active Member

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    When used in the context of exchange traded products such as stocks, options or futures, haircut is used interchangeably with the term margin. It is the amount of capital required by a broker to maintain the positions currently in a trading account. If haircut exceeds the account's capital, the broker can either require additional capital (e.g. margin call), or liquidate positions until the haircut no longer exceeds available capital.

    [edit] Other us



    http://en.wikipedia.org/wiki/Haircut_(finance)
     
    Last edited: Feb 9, 2008
  5. vsangeeth

    vsangeeth Member

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    with sharekhan u have the option to trade with margin money....If there is n0 cash in your account...You can use your shares as margin and trade on the share value...
    suppose you have zero balance in your sharekhan account...still you want to trade..You have some shares worth 10000 in your dp account....so you can use these shares as margin...
    but sharekhan wont provide margin on full sharevalue...they always price in a correction of 40% on the share value and you can get margin only on the remaining amount...so your shares worth 10000 value is cut [hair cut] bt share khan and only the remaining amount ie 6000 you can get margin...

    you cannot use shares on T'T SEGMENT TO GET MARGIN...


    hope i've cleared your doubt
     
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  6. doctorrahul

    doctorrahul Member

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    Thanks friend for the help.
    i post here what i found.
    When used in the context of exchange traded products such as stocks, options or futures, haircut is used interchangeably with the term margin. It is the amount of capital required by a broker to maintain the positions currently in a trading account. If haircut exceeds the account's capital, the broker can either require additional capital (e.g. margin call), or liquidate positions until the haircut no longer exceeds available capital.

    i think i have understood something. more inputs are welcome.

    thanks once again.
     

  7. AmoghG

    AmoghG Member

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    Thanks SMART_Trader and vsangeeth.
     
  8. doctorrahul

    doctorrahul Member

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    Thanks trade smart and vsangeeth.
     
  9. akhil999in

    akhil999in New Member

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    I left my ShareKhan site unopened for a long time.
    Now it shows the names of about 10 Shares, and Before DP Haircut 2350/- , after
    DP Haircut only 350/- (approx. figures).

    1) Does it mean that due to my inaction during this period I have lost about 2000/- ?

    2) I do not do anything on the ShareKhan site for long periods. Is it possible that
    one day I might not only have lost my entire starting money (= 5,000/- that I
    gave when opening the S'Khan accounts), but even become liable to pay some
    thing more (to ShareKhan's or some other Bodies) ?

    3) Can a completely ignorant and careless person loose more than his starting money ?
     
  10. Tdarer

    Tdarer Member

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    Afaik, What vsangeeth has tried to explain is that if you want margin money on your shares then you can get margin worth only 350 rs only.
    The value of your shares is 2350.

    >I do not do anything on the ShareKhan site for long periods. Is it possible that
    one day I might not only have lost my entire starting money (= 5,000/- that I
    gave when opening the S'Khan accounts), but even become liable to pay some
    thing more (to ShareKhan's or some other Bodies) ?
    To lose money also, you need to make some efforts. so dont worry. just take care of your fixed and variable brokerage charges and account maintenance charges and charges under 'others' category.

    >Can a completely ignorant and careless person loose more than his starting money ?
    Yes, he can. Usu, you need to show only 5% margin for buying futures i.e. only 5 rs if you are purchasing worth 100 rs. so, if your loss is 50 rs, then you have to pay 45 rs more.

    Cheers.!
     
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