Advanced Hair Cuts

Advanced Hair Cuts:

In advanced haircut is a percentage that is subtracted from the market value of an asset that is being used as collateral. The size of the haircut reflects the perceived risk associated with holding the asset.

However, the lender has a lien for the entirety of the asset. The lower the haircut, the safer the loan is for a lender.

The human body, apart from areas of glabrous skin, is covered in follicles which produce thick terminal and fine vellum hair. Most common interest in hair is focused on hair growth, hair types and hair care, but hair is also an important biomaterial primarily composed of protein, notably keratin. Lower haircuts allow for more leverage. Haircut has an important role on many kinds of trades, for example for Repo or Reverse Repo.