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Terms starting with H

17 terms

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Technical Analysis & Chart Patterns

Hammer

A candlestick with a small body near the top of its range and a long lower wick, appearing after a decline.

Test: Lower Wick is at least twice the Body, Upper Wick is minimal, and the candle follows a decline qualitative Technical Analysis & Chart Patterns

Hanging Man

A candlestick with a small body near the top of its range and a long lower wick, appearing after an advance.

Test: Lower Wick is at least twice the Body, Upper Wick is minimal, and the candle follows an advance qualitative Technical Analysis & Chart Patterns

Harami

A two-candle formation in which a small body sits entirely within the range of the preceding large body.

Test: current body's high and low both fall inside the previous candle's body qualitative Technical Analysis & Chart Patterns

Head and Shoulders

A formation of three peaks in which the middle peak is the highest and the outer two are roughly level, joined by a neckline through the…

Neckline = line through the two lows between the peaks; conventional measured move = Head Height above Neckline, projected down from the break qualitative Risk & Portfolio Management

Hedging

Taking an offsetting position to reduce the loss an existing exposure would suffer from an adverse move.

Hedge Ratio = Value of Exposure x Beta / Contract Value of the Hedging Instrument ratio (x, times) Technical Analysis & Chart Patterns

Heikin-Ashi

A modified candlestick chart in which each period's values are averaged with the previous period's to smooth the series.

HA Close = (Open + High + Low + Close) / 4; HA Open = (Previous HA Open + Previous HA Close) / 2 ₹ Market Psychology & Behavioural Finance

Herd Behaviour

The tendency to follow the actions of a larger group rather than one's own analysis.

Test: the decision follows what others are doing, without independent evidence being gathered or weighed qualitative Orders, Execution & Market Structure

High-Frequency Trading

Algorithmic trading characterised by very short holding periods, very high order counts and competition on latency.

Test: holding periods measured in milliseconds to seconds, with order-to-trade ratios far above those of ordinary participants qualitative Bonds & Fixed Income

High-Yield Bond

A bond rated below investment grade, offering a higher coupon to compensate for higher default risk.

Test: the rating is BB+ or lower on the standard scale qualitative Market Psychology & Behavioural Finance

Hindsight Bias

The tendency to believe, after an event, that it was more predictable than it actually was.

Test: recalled prior probability estimates shift toward the outcome that actually occurred qualitative Derivatives, Futures & Options

Historical Volatility

The realised standard deviation of an underlying's returns over a past period, annualised.

Historical Volatility = Standard Deviation of Daily Log Returns x square root of 252, expressed as a percentage % Corporate Actions, Dividends & Governance

Holding Company

A company whose principal assets are controlling stakes in other companies rather than an operating business of its own.

Test: the company controls the composition of another company's board or holds more than half its voting power qualitative Market Psychology & Behavioural Finance

Home Bias

The tendency to hold a far larger proportion of domestic assets than global market weights would suggest.

Test: domestic allocation substantially exceeds the home market's share of global market capitalisation % Market Psychology & Behavioural Finance

Hot-Hand Fallacy

The belief that a run of successes will continue because the performer is on a streak.

Test: the predicted probability of continued success rises with the length of a prior run of successes qualitative Market Psychology & Behavioural Finance

House Money Effect

Taking greater risks with money regarded as winnings than with money regarded as one's own.

Test: risk tolerance rises after gains, treating profits as a separate account with lower value qualitative Funds, ETFs & Index Investing

Hybrid Fund

A mutual fund that invests across both equity and debt, in proportions set by its stated category.

Test: the scheme holds a defined mix of equity and debt, with the allocation range specified in the scheme document % Market Psychology & Behavioural Finance

Hyperbolic Discounting

Discounting future rewards at a rate that falls as the delay increases, producing inconsistent preferences over time.

Test: preference between two future rewards reverses as both move closer in time, though the interval between them is unchanged qualitative