R-Squared
R-Squared reflects the percentage of a fund's movements that is explained by movements in the fund's benchmark index. An R-Squared of 100 means that all movements of a fund are completely explained by movements in the benchmark index. A low R-Squared means that few of a fund's movements are explained by the movements of the index. For example, an R-Squared of 35 means that 35 % of a fund's movements can be explained by movements in the fund's index. R-Squared is used to assess the significance of a particular alpha or beta. As a rule, a higher R-Squared indicates a more reliable beta figure. Conversely, if the R-Squared is lower, then the beat is less relevant to the performance of the fund.

Ratio Hedge
The number of options compared to the number of futures contracts bought or sold in order to establish a hedge that is risk neutral.

Ratio Spread
This strategy, which applies to both puts and calls, involves buying or selling options at one strike price in greater number than those bought or sold at another strike price.

Redemption
The return of an investor's principal in a security, such as a stock, bond, or mutual fund at it's current market value less fees.

Redemption Fee
A fee charged upon a voluntary redemption from an investment fund.

Redemption Notice Period
The required notification period of an intended redemption request. Notification is usually required in writing.

Regulation D
This strategy, usually called Reg D, involves investing in micro and small capitalization public companies which are raising money in the private capital markets. The manager can invest via the stock, via convertibles or other derivatives. Investments usually take the form of receiving a convertible bond or convertible preferred issue in return for an injection of capital. What is unique about these securities is that, unlike, standard convertible bonds or preferreds, the exercise price either floats or is subject to a look back provision. This has the effect of insulating the investor from a decline in the price of the underlying stock. Typically the investor will be long the convertible, short a percentage of common stock and also hold warrants. On the effective dates of the transaction the manager can exercise, if he chooses to, and convert into common stock at a better market price.

Reset or Floating Conversion Rate Securities
This strategy involves investing either directly and/or indirectly in either the common shares, convertible securities or warrants of a public company. A common form of this strategy involves providing private financing.

Retender
In specific circumstances, some contract markets permit holders of futures contracts who have received a delivery notice through the clearing house to sell a futures contract and return the notice to the clearinghouse to be reissued to another long; others permit transfer of notices to another buyer. In either case, the trader is said to have retendered the notice.

Reverse Conversion
With regard to options, a position created by buying a call option, selling a put option, and selling the underlying futures contract.

Reverse Crush Spread
The sale of soybean futures and the simultaneous purchase of soybean oil and meal futures. The purchase of soybean futures and the simultaneous sale of soybean oil and meal futures.

Risk
The extent to which investment returns fluctuate from period to period. The primary types of risks associated with alternative investments include financial risk, operating and business risk, liquidity risk, structural risk, valuation risk, and country risk when undertaking international investments (Also see Standard Deviation).

Risk Arbitrage
See Merger Arbitrage.

Roll-Over
A trading procedure involving the shift of one month of a straddle into another future month while holding the other contract month. The shift can take place in either the long or short straddle month. The term also applies to lifting a near futures position and re-establishing it in a more deferred delivery month.

Round Turn
A completed transaction involving both a purchase and a liquidating sale, or a sale followed by a covering purchase.