Haircut
Market basicsThe percentage deducted from the value of pledged collateral when computing available margin.
In plain terms
Pledge ₹1,00,000 with a 20% haircut and you get ₹80,000 of margin. Haircuts widen exactly when markets get volatile.
1586 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Margin
DerivativesCollateral required to hold a leveraged position, adjusted daily against market movements.
In plain terms
A margin call is the broker asking for more collateral, immediately.
Margin call
Market basicsA demand for additional funds when collateral behind a leveraged position falls below the required level.
In plain terms
Pay up or the broker sells for you — usually at the worst price, in the falling market that caused the call.
Margin pledge
Trading & ordersThe arrangement, in force since September 2020, under which shares offered as collateral stay in the investor’s own demat account and are pledged in favour of the broker rather than transferred to it.
In plain terms
Brought in after brokers were found misusing client securities, so the protection is real. The cost is that releasing the pledge before a sale is now your operational problem — an unreleased pledge is a short delivery even though the shares are visibly in your account.
Pledge
Trading & ordersMarking securities as collateral, typically for margin.
In plain terms
Pledged shares are encumbered, which complicates recovery if a broker fails.
Pledging
Market basicsOffering shares you own as collateral to receive trading margin against them.
In plain terms
Borrowing against your portfolio. You keep the shares; the broker gets a claim on them.