Glossary - H

HEAD AND SHOULDERS
A sideways price formation depicting a left shoulder, head and right shoulder at the top or bottom of a market that may indicate a major market reversal.
 
HEDGE
The purchase or sale of a futures or option contract to cover another position.
 
HEDGE FUND
A hedge fund is a private pool of capital actively managed by an investment advisor. Hedge funds are normally only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators.