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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.

Hedge/Hedged Position:

A position established with the specific intent of protecting an existing position. For example, an owner of common stock may buy a put option to hedge against a possible stock price decline.

Hedging:

An investment strategy of lowering risk by buying securities that have offsetting risk characteristics. A perfect hedge eliminates risk entirely. Hedging strategies lower return since there is a cost involved in hedging. Hedge funds are investment pools that are free to use any hedging techniques they desire; they often make large bets in a relatively small number of different holdings.

Hidden Value:

An asset that is understated in the balance sheet of a company. Discovering hidden assets before the market does can lead to appreciable price gains for savvy investors.

High Flyer:

A highly speculative stock with a rising price and high volatility, which makes it vulnerable to dramatic fluctuations.

High-Yield Bond:

A bond with a speculative credit rating of BB (S&P) or Ba (Moody's) or lower is a high-yield bond. These bonds offer higher yields for investors compared to bonds of financially sound companies, but also feature greater risk. Two agencies, Standard & Poor's and Moody's, provide the ratings systems for companies' credit.

Historic volatility:

A measure of actual stock price changes over a specific period of time. See also STANDARD DEVIATION.

Holdings:

All the shares (mutual funds & stocks), contracts (options), or face amount (bonds) an investor owns. See also PORTFOLIO.

Horizontal Spread:

See TIME SPREAD.

House Call:

A brokerage firm's notice to the client that the equity in a margin account is below the firm's maintenance requirements and needs additional funds immediately.

House Maintenance Call:

Demand to the customer for additional funds from the brokerage firm because the equity in the customer's margin account has fallen below the minimum amount allowed by the firm.

Hybrid Investment:

An investment which has the major characteristics of two or more other investments. For example, a convertible preferred stock generally pays a steady dividend and has steady principal like a high quality corporate bond, but it can be converted into common stock.

Hypothecation:

A brokerage firm's pledge of margin securities at a bank to secure the funds necessary to carry an account's debit balance.