What is a Haircut in pledging and how does it affect margin at FYERS?

What is a Haircut in pledging and how does it affect margin at FYERS?

When you pledge securities at FYERS to receive collateral margin, the value considered is slightly lower than the actual market value of your holdings. This reduction is called a haircut.

A haircut is essentially a risk-control measure. It protects against market volatility by discounting the pledged value so that sudden price drops in securities do not expose traders or the broker to excess risk.

Example

If you pledge securities worth ₹20,00,000 and the applicable haircut is 10%, the collateral margin you will actually receive is:

₹20,00,000 – 10% = ₹18,00,000

Where to check haircuts

You can view the list of all approved pledgeable securities along with their applicable haircuts here:

FYERS haircut list

Key points to remember

  • Haircuts vary across securities and are determined by the exchange.
  • More volatile securities generally have higher haircuts.
  • Cash-equivalent securities (like G-Secs, Liquid ETFs) usually have lower haircuts.
  • The collateral margin released after a haircut can be used for trading in derivatives or to meet margin requirements.

What if?

ScenarioWhat you can do
My pledged value seems lower than market valueThat’s the haircut applied. Check the exact percentage on the FYERS haircut list to understand how much of the value has been adjusted for risk.
I pledged volatile stocks and got less margin than expectedVolatile stocks attract higher haircuts. Consider pledging stable or cash-equivalent instruments to get higher effective margin.
I pledged Liquidbees but still see a haircutYes, even Liquidbees have a haircut (typically around 10%). It’s lower than equities but still applied as a risk buffer.
Can haircut percentages change?Yes. Exchanges can revise haircut rates based on volatility or liquidity. Recheck periodically on the official FYERS list.

Last updated: 12 Sep 2025

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