Page 82 - PRIAA Glossary

H
HAIRCUT
The percentage by which the market value of the collateral will be reduced to allow for price volatility and instrument liquidity in respect of the relevant collateral between collateral calls. Also known as a “valuation percentage”.
HANDYSIZE PRODUCT CARRIER
A product carrier of approximately 25,000 to 45,000 deadweight tons. This type of vessel generally operates on shorter trade routes carrying refined products.
HARDWIRING
The process of incorporating a commitment to utilising an auction-based cash settlement methodology for all future credit events into ISDA credit derivative documentation. Hardwiring is achieved by the publication by ISDA in April 2009 of a “Big Bang” protocol and an auction supplement to the 2003 ISDA Credit Derivatives Definitions. See also “Big Bang Protocol” and “Small Bang Protocol”.
HEAT RATE
A measure of power station efficiency. The heat rate is the ratio of energy content in fuel consumed (e.g., gas, oil, coal) to energy content of electricity produced by that fuel. Hence, the lower the heat rate, the higher the conversion efficiency.
HEDGE FUND
An investment vehicle that is targeted to maximise returns and eliminate risk. Funded by investors, and managed
by a hedge fund manager, the investments made may be
of any type as defined by the hedge fund strategy. It is a partnership limited to high net worth investors and trades in much broader investments beyond typical stocks, bonds or derivatives of a mutual fund.
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