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What is "Haircut" in Pledge?

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When you pledge a stock, the broker holds a portion of its value for safety and gives you the rest as pledge balance. 

For instance, if you have a Rs. 1000 stock with a 20% haircut, you'll get Rs. 800 as pledge balance, and Rs. 200 is set aside for safety. Your stock is still worth Rs. 1000, and you can sell it at that price anytime.
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