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 has 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 and 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.
Historic volatility:
A measure of actual stock price changes over a specific
period of time. See also STANDARD
DEVIATION.
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