Terms starting with H
17 terms
Hammer
Technical Analysis & Chart Patterns
qualitative
A candlestick with a small body near the top of its range and a long lower wick, appearing after a decline.
Test: Lower Wick is at least twice the Body, Upper Wick is minimal, and the candle follows a decline
Hanging Man
Technical Analysis & Chart Patterns
qualitative
A candlestick with a small body near the top of its range and a long lower wick, appearing after an advance.
Test: Lower Wick is at least twice the Body, Upper Wick is minimal, and the candle follows an advance
Harami
Technical Analysis & Chart Patterns
qualitative
A two-candle formation in which a small body sits entirely within the range of the preceding large body.
Test: current body's high and low both fall inside the previous candle's body
Head and Shoulders
Technical Analysis & Chart Patterns
qualitative
A formation of three peaks in which the middle peak is the highest and the outer two are roughly level, joined by a neckline through the intervening lows.
Neckline = line through the two lows between the peaks; conventional measured move = Head Height above Neckline, projected down from the break
Hedging
Risk & Portfolio Management
ratio (x, times)
Taking an offsetting position to reduce the loss an existing exposure would suffer from an adverse move.
Hedge Ratio = Value of Exposure x Beta / Contract Value of the Hedging Instrument
Heikin-Ashi
Technical Analysis & Chart Patterns
₹
A modified candlestick chart in which each period's values are averaged with the previous period's to smooth the series.
HA Close = (Open + High + Low + Close) / 4; HA Open = (Previous HA Open + Previous HA Close) / 2
Herd Behaviour
Market Psychology & Behavioural Finance
qualitative
The tendency to follow the actions of a larger group rather than one's own analysis.
Test: the decision follows what others are doing, without independent evidence being gathered or weighed
High-Frequency Trading
Orders, Execution & Market Structure
qualitative
Algorithmic trading characterised by very short holding periods, very high order counts and competition on latency.
Test: holding periods measured in milliseconds to seconds, with order-to-trade ratios far above those of ordinary participants
High-Yield Bond
Bonds & Fixed Income
qualitative
A bond rated below investment grade, offering a higher coupon to compensate for higher default risk.
Test: the rating is BB+ or lower on the standard scale
Hindsight Bias
Market Psychology & Behavioural Finance
qualitative
The tendency to believe, after an event, that it was more predictable than it actually was.
Test: recalled prior probability estimates shift toward the outcome that actually occurred
Historical Volatility
Derivatives, Futures & Options
%
The realised standard deviation of an underlying's returns over a past period, annualised.
Historical Volatility = Standard Deviation of Daily Log Returns x square root of 252, expressed as a percentage
Holding Company
Corporate Actions, Dividends & Governance
qualitative
A company whose principal assets are controlling stakes in other companies rather than an operating business of its own.
Test: the company controls the composition of another company's board or holds more than half its voting power
Home Bias
Market Psychology & Behavioural Finance
%
The tendency to hold a far larger proportion of domestic assets than global market weights would suggest.
Test: domestic allocation substantially exceeds the home market's share of global market capitalisation
Hot-Hand Fallacy
Market Psychology & Behavioural Finance
qualitative
The belief that a run of successes will continue because the performer is on a streak.
Test: the predicted probability of continued success rises with the length of a prior run of successes
House Money Effect
Market Psychology & Behavioural Finance
qualitative
Taking greater risks with money regarded as winnings than with money regarded as one's own.
Test: risk tolerance rises after gains, treating profits as a separate account with lower value
Hybrid Fund
Funds, ETFs & Index Investing
%
A mutual fund that invests across both equity and debt, in proportions set by its stated category.
Test: the scheme holds a defined mix of equity and debt, with the allocation range specified in the scheme document
Hyperbolic Discounting
Market Psychology & Behavioural Finance
qualitative
Discounting future rewards at a rate that falls as the delay increases, producing inconsistent preferences over time.
Test: preference between two future rewards reverses as both move closer in time, though the interval between them is unchanged