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- H
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Fifth letter of a
NASDAQ stock symbol specifying that it is the second preferred bond of the company.
- H.E.X.
- See:
Helsinki Exchange
- H.K.F.E.
- See:
Hong Kong Futures Exchange
- H.L.T.
- See:
Highly Leveraged Transaction
- Haircut
- The
margin or difference between the actual
market value of a
security and the value assessed by the lending side of a transaction (i.e. a
repo).
- Handle
- The whole-dollar price of a
bid or
offer is referred to as the handle (ie. if a
security is quoted at 101.10 bid and 101.11 offered, 101 is the handle).
Traders are assumed to know the handle. See:
Full
- Hard capital rationing
-
Capital rationing that under no circumstances can be violated.
- Hard currency
- A freely convertible
currency that is not expected to depreciate in value in the foreseeable future.
- Hard dollars
- Used in the context of general equities. Actual, separate payments made by a customer for services including research, provided by a brokerage firm. Antithesis of
soft dollars.
- Harmless warrant
-
Warrant that allows the user to purchase a
bond only by surrendering an existing bond with similar terms.
- Hart-Scott-Rodino Act
- Often used in risk arbitrage. Antitrust act administered by U.S. Department of Justice and the F.T.C. that requires an
investor to file a form with the government before he acquires an economic interest in the lesser of $15 million or 15% in a specific
security. The government has thirty days to respond to the filer.
- Harvey, Campbell R.
- Author of this glossary. Finance professor at Duke University. Author of research on international finance, asset allocation and emerging markets.
- Head & shoulders
- In
technical analysis, a chart formation in which a
stock price reaches a peak and declines, rises above its former peak and again declines and rises again but not to the second peak and then again declines. The first and third peaks are shoulders, while the second peak is the formation's head.
Technical analysts generally consider a head and shoulders formation to be a very
bearish
indication.
- Heavy
- Used in the context of general equities. Presently dominated by sellers, or over-supply, in the
market or
security resulting in falling
prices. See:
overbought,
resistance level,
tired
- Hedge
- A transaction that reduces the
risk of an investment.
- Hedge fund
- A fund that may employ a variety of techniques to enhance
returns, such as both buying and
shorting
stocks based on a valuation model.
- Hedge ratio (delta)
- The ratio of
volatility of the portfolio to be
hedged and the
return of the volatility of the hedging
instrument. For convertibles, percentage of a
convertible bond representing the number of
underlying
common shares sold against the shares into which bonds are convertible. If a
preferred is convertible into 2.0 common shares, a 75% hedge ratio would be
short (long) 1500 common for every 1000 preferred long (short). For
options, ratio between the change in an option's theoretical value and the change in price of the
underlying
stock at a given point in time. See:
Delta
- Hedged portfolio
- A
portfolio consisting of the
long position in the
stock and the
long position in the
put option, so as to be riskless and produce a
return that equals the
risk-free interest rate.
- Hedgie
- Slang for a
hedge fund.
- Hedging
- A strategy designed to reduce investment
risk using
call options,
put options,
short selling, or
futures contracts. A hedge can help lock in existing
profits. Its purpose is to reduce the
volatility of a
portfolio, by reducing the risk of loss.
- Hedging demands
- Demands for
securities to
hedge particular sources of consumption
risk, beyond the usual mean-variance
diversification motivation.
- Held at the opening
- Used for listed equity securities. Not open for
trading due to
specialist or regulators disallowing
trading to occur until imbalances dissipate or news is allowed to disseminate.
- Held order
- Used for listed equity securities.
Order which must be
executed without hesitation (market held -
Hit the bid or
take the offer in line) or if the
stock can be bought or sold at that price (held
limit order) in sufficient quantity.
- Hell-or-high-water contract
- A
contract that obligates a purchaser of a project's output to make cash payments to the project in all events, even if no product is offered for sale.
- Helsinki Exchanges (HEX)
- The Helsinki Exchanges (HEX Ltd, Helsinki Securities and Derivatives Exchange and Clearing House) was formed at the beginning of 1998 following the merger of the Helsinki Stock Exchange Ltd and SOM Ltd, the Securities and Derivatives Exchange and the Clearing House.
- Herstatt risk
- The
risk of loss in
foreign exchange trading that one party will deliver foreign exchange but the
counterparty financial institution will fail to deliver its end of the contract. It is also referred to as settlement risk.
- H-H page
- Quotron display page that shows new listed
inquiries/orders received after the block call.
- High-coupon bond refunding
- Refunding of a high-coupon bond with a new, lower coupon bond.
- High flyer
- Used in the context of general equities. High-priced and highly speculative
stock that moves up and down sharply over a short period. Generally glamorous in nature due to the
capital gains potential associated with them; also used to describe any high-priced stock. Antithesis of
sleeper.
- High price
- The highest (intraday) price of a
stock over the past 52 weeks, adjusted for any
stock splits.
- High-yield bond
- See:
junk bond.
-
Highly leveraged transaction (HLT)
- Bank
loan to a highly
leveraged firm.
- Historical cost
- Terminology for the accounting cost that is carried in the books for a current cost of the item.
- Historical exchange rate
- An accounting term that refers to the
exchange rate in effect when an
asset or
liability was acquired.
- Hit the bid
- A
dealer who agrees to sell at the
bid price quoted by another dealer is said to "hit" that bid. Antithesis of
take the offer.
- Hit the ribbon
- Used in the context of general equities. See:
Print
- Holder of record date
- The date on which holders of record in a firm's
stock ledger are designated as the recipients of either
dividends or stock rights. Also called
date of record.
- Holding company
- A corporation that owns enough
voting
stock in another firm to control management and operations by influencing or electing its board of directors.
- Holding period
- Length of time that an individual holds a
security.
- Holding period return
- The
rate of return over a given period.
- Homemade dividend
- Sale of some
shares of
stock to get cash that would be similar to receiving a
cash dividend.
- Homemade leverage
- Idea that as long as individuals borrow (or lend) on the same terms as the firm, they can duplicate the affects of corporate
leverage on their own. Thus, if levered firms are priced too high, rational
investors will simply borrow on personal accounts to
buy shares in unlevered firms.
- Home run
- Used in the context of general equities. Large
capital gain in a
stock in a short period of time.
- Homogeneity
- The degree to which items are similar.
- Homogeneous
- Exhibiting a high degree of
homogeneity.
-
Homogenous expectations assumption
- An assumption of
Markowitz
portfolio construction that investors have the same expectations with respect to the inputs that are used to derive efficient portfolios:
asset
returns,
variances, and
covariances.
- Hong Kong Futures Exchange (H.K.F.E.)
- Established in 1976, the Hong Kong Futures Exchange (H.K.F.E.) operates futures and options markets in index, stock, interest rate and foreign exchange
products.
- Horizon analysis
- An analysis of
returns using total return to assess performance over some investment horizon.
- Horizon return
- Total
return over a given horizon.
- Horizontal acquisition
-
Merger between two companies producing similar goods or services.
- Horizontal analysis
- The process of dividing each expense item of a given year by the same expense item in the base year. This allows for the exploration of changes in the relative importance of expense items over time and the behavior of expense items as sales change.
- Horizontal merger
- A
merger involving two or more firms in the same industry that are both at the same stage in the production cycle; that is two or more competitors.
- Horizontal spread
- The simultaneous purchase and sale of two
options that differ only in their
exercise date.
- Host security
- The security to which a
warrant is attached.
- Hot
- Used in the context of general equities.
Active, usually with positive price implications.
- Hot money
- Money that moves across country borders in response to
interest rate differences and that moves away when the interest rate differential disappears.
- "How are you making XXX?"
- "What is your market in a particular stock?" See:
quotation
- Hubris
- An arrogance due to excessive pride and an insolence toward others.
- Human capital
- The unique capabilities and expertise of individuals.
- Hurdle rate
- The
required return in
capital budgeting. E.g. if the project has an expected
rate of return greater than the hurdle rate, the project may be accepted.
- Hybrid
- A package containing two or more different kinds of
risk management
instruments that are usually interactive.
- Hybrid security
- A
convertible security whose optioned
common stock is
trading in a middle range, causing the convertible security to trade with the characteristics of both a fixed-income security and a
common stock
instrument.
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