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Hot Issue: What It Is, How It Works, and an Example Definition A hot issue is an initial public offering (IPO) that attracts unusually strong investor demand, often becoming oversubscribed. Such IPOs frequently draw speculators hoping to generate short-term gains rather than investors focused on the company’s long-term fundamentals. Key takeaways A hot issue is…

Hot Hand What it is The “hot hand” describes the belief that after a streak of successes, an individual or team is more likely to continue succeeding. The opposite is the “cold hand”—the idea that a run of failures makes further failures more likely. In reality, whether a streak implies anything about future outcomes depends…

Hostile Takeover Bid A hostile takeover bid is an attempt to gain control of a publicly traded company without the cooperation or consent of its board of directors. When a board rejects an acquisition proposal, the would-be acquirer typically pursues one of three paths: buying shares on the open market, making a tender offer directly…

Hostile Takeover: Definition, How It Works, Defenses, and Examples Key takeaways * A hostile takeover occurs when an acquirer attempts to gain control of a target company against the wishes of its management. * Common methods are tender offers, proxy fights, and open‑market accumulations of voting stock. * Defenses include differential voting rights, employee ownership…

Hostile Bid: What It Is, How It Works, and an Example Key takeaways * A hostile bid is a takeover attempt made directly to a company’s shareholders after management rejects the offer. * Hostile bids typically use a tender offer and may trigger a proxy fight to replace management. * A friendly bid is the…

Hospital Revenue Bonds A hospital revenue bond is a municipal bond issued to finance construction, renovation, or equipment purchases for hospitals. Unlike general obligation (GO) bonds, hospital revenue bonds are repaid from the specific revenues generated by the hospital’s operations rather than from tax revenues. Key takeaways Secured by hospital operating revenues (patient fees, service…

Horizontal Well What it is A horizontal well is a directional drilling technique in which the wellbore is steered to run nearly sideways through a reservoir—typically drilled at an angle of about 80 degrees or more from vertical. This approach lets operators access and produce oil or natural gas from formations that are thin, widely…

Horizontal Spread (Calendar Spread): What It Is and How It Works Key takeaways A horizontal (calendar) spread uses long and short option or futures positions on the same underlying and strike price but different expiration dates. It is typically constructed to reduce the impact of time decay and to trade expectations about near-term volatility. Long…

Horizontal Merger A horizontal merger is the combination of two companies that operate in the same industry and at the same stage of the value chain. Firms pursue horizontal mergers to increase market share, achieve cost and revenue synergies, expand product offerings or geographic reach, and strengthen competitive position. Key takeaways Combines direct competitors or…

Horizontal Market A horizontal market serves a broad range of industries and customer types with products or services that are widely applicable rather than industry-specific. Because demand for these offerings is widely distributed, producers in horizontal markets typically face lower demand risk but higher competition. How it works Products or services address common needs across…

Horizontal Line A horizontal line is a straight line parallel to the x-axis. In charts and data, every point on a horizontal line shares the same y-value. Traders and analysts use horizontal lines to identify and visualize important price or value levels. Key takeaways In technical analysis, horizontal lines mark areas of support (price floor)…

Horizontal Integration Horizontal integration is a growth strategy where a company acquires, merges with, or expands into other firms that operate at the same stage of the value chain within the same industry. The goal is to increase market share, reduce competition, realize cost efficiencies, and broaden product or geographic reach. Key takeaways Involves combining…

Horizontal Equity What it is Horizontal equity is the principle that individuals with the same ability to pay—usually measured by similar income or assets—should face the same tax burden. A tax system that treats equals equally is considered horizontally neutral and therefore more fair under this concept. How it differs from vertical equity Horizontal equity…

Horizontal Channel What is a horizontal channel? A horizontal channel (also called a price range or sideways trend) is a technical-chart pattern formed by two parallel trend lines that connect pivot highs (resistance) and pivot lows (support). It indicates a period where buying and selling pressures are roughly equal and price oscillates sideways between the…

Horizontal Analysis Horizontal analysis (trend analysis or base-year analysis) compares financial statement line items or ratios across multiple periods to reveal growth patterns, trends, and relative changes over time. Each item in a succeeding period is expressed as a dollar change and/or as a percentage of the base-year amount (the base year = 100%). What…

What is a horizontal acquisition? A horizontal acquisition (also called horizontal integration) occurs when one company acquires another that operates in the same industry and at the same stage of production. The acquiring firm increases capacity, market share, and scale while keeping the core business operations similar rather than changing the production model. How it…

Horizon Analysis: What it Means and How It Works Horizon analysis projects and compares the expected total returns of a security or portfolio over specific investment time frames (investment horizons). It is most commonly used with fixed-income portfolios to evaluate how bonds are likely to perform under different interest-rate, reinvestment-rate, and market-yield scenarios. Definition Horizon…

Understanding Renewable Energy Certificates (RECs) Renewable Energy Certificates (RECs) are tradable instruments that verify one megawatt-hour (MWh) of electricity was generated from a renewable source and delivered to the grid. They separate the environmental attributes of renewable generation from the physical electricity, allowing those attributes to be bought, sold, and retired independently. Key takeaways One…

Hope Credit Overview The Hope Scholarship Tax Credit was a nonrefundable federal tax credit for higher education expenses that applied to a student’s first two years of postsecondary study. It was replaced in 2009 by the American Opportunity Tax Credit (AOTC), which expanded eligibility, increased the maximum credit, and made part of the credit refundable….

Hook Reversal What it is A hook reversal is a short-term candlestick pattern that signals a possible reversal in price direction. It appears when the second candlestick of a sequence has: * a higher low and a lower high than the previous candlestick, and * an opposite color (the body closes on the other side…

Honorarium What is an honorarium? An honorarium is a voluntary payment offered for services where a formal fee is not customary or appropriate. Common examples include payments to guest speakers, volunteer experts, or academics who provide a lecture, workshop, or short professional service. Honoraria typically help offset unreimbursed costs (travel, preparation time, lost work) rather…

Hong Kong Stock Exchange (HKG / SEHK): Overview The Hong Kong Stock Exchange (often referred to by its market code .HK or SEHK) is Hong Kong’s primary securities exchange and one of the world’s largest markets by market capitalization. It operates as a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), a publicly traded…

Hong Kong SAR, China Key takeaways Hong Kong is a Special Administrative Region (SAR) of the People’s Republic of China operating under the “One Country, Two Systems” framework, which preserves separate legal, economic, and administrative systems until at least 2047. It is a leading global financial hub with a service-based economy, low taxes, free-port trade,…

Hong Kong Monetary Authority Investment Portfolio (HKMA) The Hong Kong Monetary Authority (HKMA) manages the Exchange Fund, whose Investment Portfolio functions as Hong Kong’s sovereign-style investment vehicle. Its primary role is to preserve and enhance the region’s reserves while supporting the stability of the currency and banking system. Quick facts One of the world’s largest…

Hong Kong Monetary Authority (HKMA) Overview The Hong Kong Monetary Authority (HKMA), founded in 1993, serves as the de facto central bank of the Hong Kong Special Administrative Region. It oversees monetary stability, the banking system’s integrity, and Hong Kong’s position as a global financial center. The HKMA also manages the Exchange Fund, Hong Kong’s…

Hong Kong Interbank Offered Rate (HIBOR) The Hong Kong Interbank Offered Rate (HIBOR) is the benchmark interest rate, quoted in Hong Kong dollars, that banks use when lending to one another in Hong Kong’s interbank market. It serves as a reference for a wide range of HKD-denominated financial products, including loans, mortgages, bonds, derivatives, and…

Hong Kong Exchanges and Clearing Limited (HKEX) Definition and key takeaways HKEX is a publicly traded holding company that operates major financial markets, including the Hong Kong Stock Exchange (HKEX/SEHK) and the London Metal Exchange (LME). Core services: listing, trading, clearing, market data, reference prices, and connectivity. Core markets: equity exchange, futures exchange, and the…

Homoskedastic — meaning and why it matters Homoskedasticity (also spelled homoscedasticity) is a condition in regression modeling where the variance of the residuals (error term) is constant across all values of the predictor(s). In other words, the spread of the differences between observed and predicted values does not change as the predictor variable changes. Why…

Homogeneous Expectations Homogeneous expectations is the assumption—central to Harry Markowitz’s Modern Portfolio Theory (MPT)—that all investors share the same expectations about future asset returns, variances, and covariances, and will therefore make identical portfolio choices given the same information. Why it matters Under MPT, investors are assumed to be risk-averse and rational. When everyone uses the…

Homo Economicus Definition Homo economicus (the “economic man”) is a theoretical model that represents an idealized decision‑maker who is perfectly rational, self‑interested, and focused on maximizing utility or profit. In this abstraction, individuals have complete information, unlimited cognitive capacity, consistent preferences, and always choose the option that yields the highest personal benefit. Origins The concept…

Homestead Exemption Key takeaways * A homestead exemption reduces property taxes and can protect a primary residence from certain unsecured creditors. * Eligibility, application requirements, and protection limits vary widely by state; some states offer automatic exemptions, others require a claim. * The exemption protects home equity up to state limits (or federal limits in…

Homeowners Protection Act — What it is and how it works The Homeowners Protection Act (HPA) of 1998, sometimes called the Private Mortgage Insurance (PMI) Cancellation Act, reduces unnecessary payments of private mortgage insurance by homeowners who no longer need it. It applies to private, residential mortgages purchased after July 29, 1999, and requires lenders…

Homeowners Insurance: Basics and What You Need to Know Key takeaways * Homeowners insurance protects the structure of your home, other on‑site structures, personal property, and provides liability coverage for injuries or damage you or household members cause. * Standard policies usually exclude flood and earthquake damage; separate policies or endorsements are needed for those…

Homeowners Association (HOA) Fee: What It Is and What to Know Key takeaways * HOA fees are recurring dues paid by property owners in communities governed by a homeowners association. * Fees fund maintenance, repairs, amenities, utilities, insurance, and reserve accounts. * Typical ranges vary widely—commonly $200–$300 per month on average, but anywhere from $100…

Understanding Homeowners Associations (HOAs) Homeowners associations (HOAs) are organizations that manage common areas and enforce property rules in subdivisions, planned communities, condominiums, and townhome developments. When you buy a property in an HOA-governed community, you typically become a member and agree to follow its rules and pay assessments. Key takeaways HOAs enforce community rules (CC&Rs)…