H - Return to Index
H - Is the Commodity Futures Symbol which represents the March Delivery Month.
Heavy Crude Oil - Is petroleum with a high specific gravity and a low API gravity. It has a relatively high proportion of heavy hydrocarbon products or fractions. Compare to Light Crude Oil.
Hedge - Is the act of protecting a position. Hedges can be either Long or Short. Hedges are often done with derivative products. A Long Hedge refers to a position whereby a derivative contract is purchased to protect against a short actual position. A Short Hedge is a position whereby a derivative is sold to protect against a long actual position.
Hedge Fund Types - Are numerous. They reflect different investment styles, product lines, and geographic regions. Among the more common varieties are:
As each name suggests, the hedge fund focuses on a core approach. Actual programs are complex. Some funds may deploy one or more of these approaches at any time. Some maybe restricted to one class of securities or markets. The degree of leverage varies between programs and managers.
Hedge Funds - Are alternative investment vehicles. Hedge fund trading styles are quite variable from one fund to another. Some are Macro Funds which place positions on movements in broad economic groups such as currencies, credit, equity and derivatives markets. Others are more focused on narrow Specialties, such as Convertible Securities or Mortgage Backed Securities. These funds operate as limited partnerships. There are limitations on the number of partners, minimum financial standards and commitments, and liabilities.
Hedge Properties - Are features considered necessary for a good risk management position. There are four basic properties, and they are: Economic Validity, Reasonable Correlative Movements, Convergence, and Consistent Basis Behavior.
Hedging - Is the process of protecting a position. It is the placement of a position to offset an exposed cash or physical market position.
Also, see Risk Management.
Hedging Paradox - Is when favorable basis movements do not guarantee a favorable global result for the hedge. Also, it can occur when the basis behavior is unfavorable yet the hedge is still beneficial.
Heteroskedasticity or Heteroscedasticity - Is the condition where the residual variance is nonconstant. This tends to happen in cross-sectional analyses. It also occurs in various consumer, income, risk, and size of firm studies. This compares to Homoskedasticity.
Historic Volatility - Is the statistical measurement of the underlying instrumentís price variability over some defined time frame such as 10, 20 30, or 50 days.
HKFE - Is the Hong Kong Futures Exchange.
Ho-Lee Option Model - Is an Arbitrage Free Model which uses an estimated spot curve to evaluate embedded options in credit or fixed income securities.
HOLA - Is the Home Owner's Loan Act.
HOMERS - Is the acronym for a class of securities initially known as Home Owner Marketable Equity Receipt Securities. This innovative financial vehicle allows for the securitization and hedging the equity-side of real estate. Previously, only hedges were doable for the debt-side of the equation.
HOMERS can be used for commercial and municipal properties. These instruments are not limited to residential securitizations. These issues can serve as the underlying securities for various derivative products.
Homoskedasticity or Homoscedasticity - Is the condition of constant residual variance. This compares to Heteroskedasticity.
Horizontal Spread - Is a spread which is composed of two puts or two calls on the same underlying instrument. It is called horizontal because both options have the same strike or exercise price but two different expiration dates. Generally, the trade is placed with the nearby option sold and the deferred option purchased. This is an attempt to capitalize on the acceleration in time value decay for the nearby relative to the deferred contract month.
Hostile - Often refers to an unsolicitated and unwanted bid by the target company. It rejects this bid and indicates that the company does not want to be acquired by that bidder.
Hot Issues - Are stocks which trade at an immediate premium relative to their initial offering price on the effective date. There are restrictions and prohibitions regarding trading in these issues. These constraints apply to brokerage firm employees and their immediate families. Other parties may also be subject to such constraints.
HR 10 Plan - See Keogh Plan.
Humped - Is a yield curve or term structure of a price curve over time that exhibits a "bump" or "hump" in its midst. It would have a concave appearance.
Hurricane Bonds - Are also Catastrophe Bonds issued to pass on unacceptably high risks to speculators. In exchange, these speculators may receive potentially greater-than-market rates of return. These bonds have characteristics comparable to those for risky Collateralized Obligation tranches.
Hybrid - Is a security which has mixed characteristics. One example is a convertible bond. It can have a coupon and pay interest and therefore partially behave like a credit market instrument. However, its conversion feature also imbues the instrument with equity characteristics.
Hybridization - Is the act or process of creating a new instrument which has two or more credit, equity, currency or commodity characteristics.
Hypothetication Agreements - Are legal documents which define the pledging of collateral. A mortgage defines the collateral for a real estate loan or Note and a securities hypothecation agreement permits margin accounts and futures accounts by stating what is being pledged to cover positions, debit balances, or even deficit balances. Generally, this document allows the owner to enjoy the usage of the property provided that no default occurs. In the event of a default the property can go to the creditor to satisfy the claim. The residual value, if any, would then go to the owner.
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Copyright © 1998-2003 Barkley International Inc. All Rights Reserved. - Page created Tuesday, May 19, 1998 by Oasis Management®. Last Modified on Friday, November 16, 2018.