Why have I received less margin when I pledge my shares?

You have received less margin due to haircut. Please note a haircut in trading is a percentage cut taken from the value of an asset you use as collateral. This cut is there to protect against the risk that the asset might drop in value or be difficult to sell quickly.

Example:
Asset: Stock worth ₹1,00,000
Haircut: 20%
Effective Value for Collateral: ₹80,000

In this case, despite the stock's market value being ₹1,00,000, only ₹80,000 is considered for collateral purposes due to the 20% haircut. This buffer helps manage the risk if the stock’s value declines.

Last updated: 2 Months Ago