MARKET STRUCTURE DICTIONARY

hair  A slang term for negative issues.  For example, I'm thinking about buying a little ZVZZT, but this name definitely has a little hair on it.

haircut  1.  The percentage that the market value of a security is reduced when calculating margin and capital requirements.  2.  A dealer spread.  3.  A general slang term for "reduction," as in The share price is so low on this one that we're probably going to need to give the commission a haircut.

half  One half of one dollar.  Equivalent to $0.50.  For example, Day around buy 50,000 ZVZZT at a half cans a quarter.

half stock  A stock with a par value of $50.

halt trading  To temporarily suspend trading in a particular stock.  Usually the result of an order imbalance or done in advance of a news release. 

hammering a stock  Industry slang for selling stock aggressively, persistently, and in size.  For example, Good God man, Bear is out hammering this stock.

hand signals  A method of communication historically used between floor brokers and their clerks, particularly on the floor of the American Stock Exchange.  The Amex traces its roots to the curbstone market located on the streets of lower Manhattan prior to 1921.  The curbstone brokers would rent office space for their phone clerks in nearby office buildings.  Hand signals were the most efficient method of communication between the clerks hanging out of the open office windows and the brokers trading on the street below (usually wearing some sort of colorful hat or jacket in order to been easily spotted).  The old habit continued when the curb market moved indoors in 1921.

Hand signals at the curb circa 1916

Photo credit:  Library of Congress

handle  The whole dollar portion of a price or a quotation.   A quote of "$25.25- $25.30, 50,000 up" would have a handle of $25.

hanging over the market  A situation in which the price of a stock is relatively weak because a large block is for sale, or is rumored to be for sale. 

hard  Describes a market with firm prices.

hard dollars  Direct cash payments made by institutional investors to broker/dealers for products and services rendered.  As opposed to SOFT DOLLARS.

hard spot  A particularly strong stock or group of stocks in an otherwise weak market.

hard stop  A live good 'til cancelled stop order.  As opposed to a MENTAL STOP.

hard to borrow list  A list of shares that are difficult (or impossible) to borrow for short sales. 

Hartford Stock Exchange  A regional exchange located in Hartford,Connecticut.  Closed in 1934. 

head trader  The manager of a trading department.  A head trader will monitor positions, risk, and regulatory compliance, as well as supervise trading personnel.  See also TRADER, SENIOR TRADER, JUNIOR TRADER, and ASSISTANT TRADER.

headwinds  Forces that act to stall upward price momentum, as in ZVZZT is going to face a lot of headwinds going into the fourth quarter.  Opposite of TAILWINDS.

heavy market  1.  A market characterized by an imbalance between sell orders and buy orders that ultimately causes prices to move lower.  For example, The market feels a little heavy.  --- No kidding genius, it looks like it’s going to zero.  2. A situation in which an actual (or rumored) large sell order creates an overhang on the market price of a stock.  For example, ZVZZT is going to stay heavy up in here as long as everyone thinks we have size for sale.

heavy volume  An unusually high volume of trading activity, as in The Dow fell 150 points today on heavy volume.

hedge  Reduce the risk of a commitment by taking an offsetting position in a related security. An example would be the purchase of put options to offset the risk of a long equity position.  See also HEDGING VEHICLES.

hedge fund  An investment vehicle open to a relatively limited group of investors that may utilize a wide variety of trading and investment strategies.  Hedge funds are often more aggressively managed than mutual funds, may hold short positions as well as long positions, employ leverage, and often make strategic and tactical use of derivatives.

hedge portfolio  Various positions held by an arbitrageur.  Generally consists of one or more long positions and one or more short positions in correlated financial instruments brought together to minimize total portfolio risk.  

hedged positions  A combination of two or more positions that theoretically offer less risk than either position taken seperately.

hedgie  A slang term for hedge fund.

hedging vehicles  Financial instruments used to mitigate risk.  Examples include FORWARD CONTRACTS, FUTURES CONTRACTS, OPTIONS CONTRACTS, AND SWAP CONTRACTS.    

held  Describes a stock that has been temporarily suspended from trading on an organized exchange.

held order  A non-discretionary order that must be either executed or presented to the market for execution immediately upon receipt.  The default in retail trading but rarely used in institutional trading.

herd instinct  An inclination to trade in a similar manner as the majority of other traders in the market.

HFT  An abbreviation of high frequency trading.

hiccup  A slang term for a short term disruption of a longer term trend.  For example, I wouldn't worry too much about this move.  I bet it’s just a hiccup.

hickey  A slang term for a loss, as in I got a bit of a hickey on that XYZ trade.

hidden (size) order  An order residing in an alternative trading system that is available for execution but is not visible to other market participants.  Also called a non-displayed order.  As opposed to a DISPLAYED ORDER.

hidden reserve   The portion of a order entered into an electronic communications network that is not visible to other market participants.  See RESERVE ORDER.

high (price)  The highest executed trade price during a specific period of time, as in Yesterday, the high in XYZ was $51.50.

high flyer  Industry lingo for a heavily traded, high priced, and volatile stock that usually trades at a relatively rich valuation due to high investor expectations.

high frequency trading  A form of algorithmic trading in which computers are programmed either to generate orders that provide high speed short term liquidity to the market (see AUTOMATED MARKET MAKING), to take advantage of liquidity imbalances and short term pricing inefficiencies (see PAIRS TRADING and STATISTICAL ARBITRAGE), or to engage in dubious or outright manipulative practices (see PREDATORY ALGORITHMS, LATENCY ARBITRAGE, FLASH ORDERS, and GAMING).  High frequency trading relies on ultralow latency to conduct high speed, high turnover computerized trading operations. 

high touch trading  The traditional method of trading in which customers enter orders with human traders who personally execute the orders.  In high touch trading, computers are utilized merely as one of the available tools for execution.

higher  Above the current market price, as in XYZ, I'm a seller higher.

highest bid  See BEST BID.

highs  Describes a stock whose current price has exceeded the highest price reached during the prior fifty two week period.  For example, It looks like ZVZZT may break out to new highs.

hit  A loss on a trade, as in I took a bit of a hit on that XYZ trade.

hit the bids  1.  In general, means to sell stock to the traders quoting the best bid.  Usually implies offering enough stock to remove all liquidity from the best bid thereby establishing a new lower bid price.   2.  More specifically, OTC traders hit the bids by simultaneously offering stock to each market maker posted at the best bid.  For example, ZVZZT, I'm going to hit the bids at $25 1/4 and then offer the balance of your stock there.  Opposite of TAKE THE OFFERS or LIFT THE OFFERS.  See also TAP THE BIDS.

hit the ribbon  Trader's lingo meaning "print to the ticker tape," as in It looks like 100,000 XYZ just hit the ribbon.

hit the tape  Trader's lingo meaning "print to the ticker tape," as in It looks like 100,000 XYZ just hit the tape.

hog  A slang term for an overly greedy speculator, as in Pigs get fat, hogs get slaughtered.

hold  To invest in a stock for a relatively long period of time.

holder  An owner of a stock, as in ZVZZT, I catch 100,000 for sale … check the holders.  See also FRONT PAGE HOLDER.

holding the bag  Holding a losing position nearly to the point of worthlessness, as in It looks like I'm going to be the dope left holding the bag in this stock.

holding the floor  Possessing the first right to buy or to sell a particular stock on an exchange. 

holding the market  1.  Keeping a market steady by entering enough buy orders to prevent a decline and/or enough sell orders to prevent an advance.  2.  Another term for holding the floor.

home run  A slang term for a highly profitable trade.  See also BAGGER.

honeycombed with stop orders  Describes a market that contains a plethora of stop orders at various price points. 

Honolulu Stock Exchange  A regional exchange founded in 1898 in Honolulu, Hawaii.  Closed in 1977.

hook  See OFF THE HOOK and ON THE HOOK.

hook book  A list maintained by broker/dealers of losses attributable to customer requests for capital commitment.  The list is used to calculate a loss ratio for each customer.

hoot  An abbreviation of hoot-n-holler. 

hoot-n-holler  A slang term for an intercom system used by broker/dealers to internally disseminate trading information.  Also called a squawk box.

hop  1.  Exit a conversation, as in I’m getting another call … I’ve gotta hop.  2.  See ON THE HOP.

horizontal  Describes prices that move in a narrow range for an extended period of time, as in Watching this kind of horizontal tape action is like watching paint dry.

horse's mouth  A slang term for the original source of inside information.

hot order  An order from a well informed trader based on an informational advantage or a short term shift in money flows.  For example, I'd be careful with that one.  It has all of the markings of a hot order from a fast guy.

hot stock  A very active and volatile stock.  Usually implies an upward price momentum as well.  For example, I can't believe how hot ZVZZT has gotten.  Six months ago, you couldn't give the stock away.

house  1.  Another term for broker/dealer firm.  2.  A term for the London Stock Exchange.

house account  A proprietary trading account at a broker/dealer.

house broker  A FLOOR BROKER who is an employee of an exchange member firm and who executes trades for that particular firm and its customers exclusively.  Also known a commission house broker.   See also TWO DOLLAR BROKER.

how are you making XYZ?  Equivalent to "what is your quote in XYZ?"

how's XYZ?  Equivalent to "what is your quote in XYZ?"  Basically an abbreviation of "how are you making XYZ?"

hung up  To be committed to a position the value of which has fallen well below the original purchase price.  For example, Unfortunately, I can't buy any ZVZZT right now.  I'm hung up on this XYZ trade.

hunkering down  Aggressively selling a relatively large position in order to convert an asset to cash.

hybrid market  1.  A market that is quote driven as well as order driven.  The New York Stock Exchange and the NASDAQ both fit this definition currently.  2.  A market that utilizes both automatic electronic trading systems as well as traditional floor trading.  The New York Stock Exchange fits this definition.