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ILC Glossary of Financial Terms: H

From Hedge to Hypothecate

Hedge:

A transaction used as a protective manoeuvre intended to reduce the risk of loss from price fluctuations of securities.

High:

The highest price that was paid for a stock during a certain period. For example, the high for the day was $80, but the high for the year was $120.

Holding Company:

A company that owns the securities of another company, usually with voting control.

Horizontal Spread:

Purchasing either a call or put option and simultaneously selling the same type of option with the same strike price but a different expiration month.

Hypothecate:

To pledge securities as collateral for a loan.