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Glossary

Glossary

All | # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
There are 6 terms in this directory beginning with the letter H.
Hedge of hedging
The practice of reducing price fluctuation risk by taking a position in futures equal and opposite to an existing or anticipated cash position, or by shorting a security similar to one in which the long position is established. It is used by banks, corporations and individuals by buying (long) or selling (short) in the financial futures market, and it is also used in covering long or short positions in foreign currencies.

Hockey stick projections
The general shape and form of a chart showing revenue, customers, cash, or some other financial or operational measure that increases dramatically at some point in the future. Entrepreneurs often develop business plans with hockey stick charts to impress potential investors.

Holding Company
A corporation that owns the securities of another, in most cases with voting control.

Holding Period
The amount of time an investor has held an investment. The period begins on the date of purchase and ends on the date of sale, and determines whether a gain or loss is considered short-term or long-term, for capital gains tax purposes.

Hot Issue
A newly issued stock that is in great public demand. Technically, it is when the secondary market price on the effective date is above the new issue offering price. Hot issues usually experience a dramatic rise in price at their initial public offering because the market demand outweighs the supply.

Hurdle Rate
The internal rate of return that a fund must achieve before its general partners or managers may receive an increased interest in the proceeds of the fund. Often, if the expected rate of return on an investment is below the hurdle rate, the project is not undertaken.

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