Mondo Visione Worldwide Financial Markets Intelligence

FTSE Mondo Visione Exchanges Index:

Glossary

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  28. 0-9
Hedge
The purchase or sale of options or futures contracts as a temporary substitute for a transaction to be made at a later date. Usually it involves opposite positions in the cash or futures or options market.
Hedge ratio
For futures the number of contracts required to hedge one contract’s value of the underlying asset. For options see Delta.
High frequency trading
High frequency trading refers to trading activity that employs extremely fast automated programs for creating, routing, canceling, modifying, and executing orders in electronic markets. High frequency traders submit and cancel a massive number of orders and execute a large number of trades, trade in and out of positions very quickly, and end each trading day without a significant open position. Banks, hedge funds and proprietary firms use high frequency trading to exploit minute movements in stock prices and quickly trade huge blocks of stock through complex computer algorithms.
Historical volatility
The annualised standard deviation of percentage changes in futures prices over a specific period. It is an indication of past volatility in the marketplace.
Horizontal spread
A calendar or time spread.
Hors-côte
The market on the Paris Stock Exchange where issues not traded on the official list or second market are traded.
Implied volatility
A measurement of the market’s expected price range of the underlying commodity futures based on the market-traded option premiums.
Index
A number that measures changes in financial markets. Some indexes are used as benchmarks that financial performance is measured against.
Indexed bond
A bond whose payments are linked by an index (such as a consumer-price index).
Index-linked gilt
A gilt, the interest and capital of which change in line with the Retail Price Index.