Glossary

Hang Seng Index
The principal Hong Kong Share Price Index, equivalent to the Australian All Ordinaries Index.

Headline Inflation
The published overall inflation rate, unadjusted for non-economic factors, as opposed to underlying inflation.

Head
A charting term similar to a peak. On charts where there are several peaks in succession, the highest peak is referred to as the head, and the lower peaks on either side of the head are known as shoulders.

Hedge
a) (Noun) An investment position taken up to counteract the risk of another position, eg. the purchase of a put option to offset potential losses from ownership of physical stock; b) (Verb) To take up such an investment positon.

Hedge Fund
A type of investment portfolio under which the fund manager is authorised to utilise a number of higher risk investment techniques, including using derivatives, short selling and borrowing funds to generate a higher return. Hedge funds have become particularly common in the United States but are not prominent in the Australian investment scene at present.

Hedge Ratio
A ratio, usually expressed as a decimal between 0 and 1, representing the likely movement in an option premium for a given move in the underlying market price of the relevant commodity, currency or investment instrument. The hedge ratio indicates how much of the underlying asset to hold against an option position in order to achieve a riskless state. (See also Delta).

Hedging
The practice of undertaking one investment activity in order to protect against loss in another, eg. selling short to nullify a previous purchase, or buying long to offset a previous short sale. While hedges reduce potential losses, they also tend to reduce potential profits. Typical hedges include currency forwards and share and bond futures.

Historical Volatility
The actual volatility, ie. variability in price, exhibited by an underlying instrument over an established period of time.

Holding Company
A company which owns and exercises a controlling interest in another company or companies.

Holding Period
The length of time a security is held.

Home Equity Loan A home equity account gives you a revolving line of credit secured by the value of your house.
This allows you to use the funds for any other purpose such as the purchase of a second property, or shares or other investments.
The interest rate is generally higher than a standard variable rate, and these accounts are not suitable for everyone.

Home Page
An individual or company's electronic address on the Internet where visual and audio information can be presented. A home page serves as a sort of electronic bulletin board where files can be posted for browsers to download. The Worldwide Web is the largest library of home pages on the Internet. Most home pages are written in Hyper-Text Markup Language and contain 'links' that allow users to jump to other related home pages.

Honeymoon Rate Colloquial term applied to Introductory Loans. The rate can be fixed, capped or variable for the first 12 months of the loan. At the end of the term the loan reverts to the standard variable rate.
Capped Rate
The rate applied to Honeymoon (Introductory Loans) which is capped at a rate that will not rise above the prevailing Standard Variable Rate, but may fall.
Fixed Rate
The rate applied to Honeymoon (Introductory Loans) which is fixed at a set rate which will not change for the duration of the honeymoon rate period.
Variable Rate
The rate applied to Honeymoon (Introductory Loans) which is variable and usually set at a discount below the Standard Variable Rate.

Horizontal Integration
The acquisition by a company of another company which is operating in the same market. (See also Vertical Integration).

Household Sector
The part of the economy which is made up of individuals, families, etc. as distinct from businesses and government enterprise.

HTML
Abbreviation for Hyper-Text Markup Language.

Hurdle Return
The minimum acceptable return an investor requires from an investment.

Hyperinflation
A state of excessive inflation.

Hyper-Text Markup Language (HTML)
The most common language used in programming Internet home pages.

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.

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