Glossary

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.

Historic volatility
A measure of actual stock price changes over a specific period of time. See also Standard deviation

"Hit the bid"
Acceptance of purchasing at the offer or selling at the bid.

Holder
Any person who has made an opening purchase transaction, call or put, and has that position in a brokerage account.

Horizontal spread
An option strategy which generally involves the purchase of a farther-term option (call or put) and the writing of an equal number of nearer-term options of the same type and strike price. Example: buying 1 XYZ May 60 call (far-term portion of the spread) and writing 1 XYZ March 60 call (near-term portion of the spread). See also Calendar spread