H – Investment Vocabulary

Hedging: A method used by traders to minimize losses resulting from price fluctuations in the money market. The method involves counterbalancing a present sale or purchase with the purchase or sale of a similar or different security, usually for delivery at some future date. The desired result is that the profit or loss on a current sale or purchase will be offset by the loss or profit on the future purchase or sale.
Holder: The person or entity that has possession of a negotiable instrument.
Hypothecation: An agreement that pledges securities to guarantee a loan without transferring title to the securities.