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Glossary - H
A practice of taking one market position to offset potential losses in another. For example using a futures a contract to reduce the impact of price fluctuations in a cash or physical market. Like when you may like to cover possible loss by also backing the horse for a place. In securities trading, since there is no win or place, you have to look for another investment avenue where the return is less but the risk is also correspondingly less. A hedger takes an equal and opposite position in the futures market to the one he holds in the equity market.
The highest price that was paid for a security during a certain time period. This can be expressed daily, weekly, and monthly or for a 52-week period. For example, the high for the day can be 20, but the high for the year can be 50. It helps to know the price history of a security over a period of time as an additional support for current buy or sell decision.
A stock whose price rises quickly the day it goes public. Let's say you buy a new offering at Rs.10. What would you do if, on the first day of listing on the exchange it is quoted at Rs.25? Sell, or wait for a further increase. The same old choice: should I sell now and make a profit or wait for a while in hope that the price will go up further?
Pledging assets against a loan using properties such as securities as collateral for loan, but not transferring legal ownership to the lender - which does not mean that you will not lose your collateral if you default on repayment. With a little paper work, the lender can sell your collateral to realize his payments.