Glossary - H

Hedge
A hedge is typically accomplished by making approximately offsetting transactions that will largely eliminate one or more types of risk.

Hedge fund
A private pooled investment fund, usually only open to a limited number of investors. Subject to less restrictions and regulations, hedge funds can use aggressive, often speculative and leveraged investment strategies in pursuit of a higher return.

High
The highest price paid for a stock during a certain period.

High income shares
Shares that generate high income and also have the potential for good capital growth over the long term.

High-premium convertible debenture
A bond with a long term, high premium, common stock conversion feature that also offers a fairly competitive interest rate.

High-yield bonds
Lower-quality (or non-investment-grade) bonds, which give a higher yield in return for the investor accepting more risk.

Historic pricing
The pricing of unit trusts based on the last valuation of the fund.

Historical volatility
The volatility in the underlying’s price, rate or return over a specific period in the past, usually measured as the standard deviation of the natural log of the underlying price relatives. It is used to check whether the implied volatility of an option is cheap or expensive by historical standards.

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

Holdings
The common name for stock held in an investor’s account or portfolio.

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 expiry month.