Hedge fund

For example, in one of the most fundamental hedge operation. Fund managers to buy a stock, and buy the stock after a certain price and timely of put options. The utility of put options when stock price is the price of an option crosses the limit, the seller option holder can hold hands the shares of a price of limited options, so that the risk of stock falls to get hedge.

For example, in another and hedge fund manager operation, the first selected some kind of bullish outlook for the industry, see a few good industry high quality stocks, at the same time to sell a certain rate this industry poor a few inferior shares. So the results of the combination, if the industry is expected to perform well, the high quality stock or will more than any other industry, buying shares of the inferior quality of the shares profit will be greater than the shorting of inferior as a result of the loss; If the industry expected mistakes, not the rose, stock fallen so inferior stocks will be greater than the high quality stock fall, the short positions the gains will be higher than buying the high quality stock fell loss. Because of this operation method, the early hedge funds can say is a conservative value based on a hedge fund management form of investment strategy.

After decades of evolution, Hedge Fund has lost its initial risk the connotation of Hedge Fund Hedge, the titular appellation also. Hedge funds have become a new kind of investment mode, which based on the pronoun of the latest investment theory and extremely complex financial markets operate skill, make full use of all kinds of financial derivatives, the lever of the high risk, the pursuit for utility high returns for the investment mode.

A hedge fund is an investment fund a form. Belong to the disclaimer market products. Hedge fund called fund, actual and mutual funds safety, benefits, value-added investment idea has essential difference between. This fund used various trading methods (such as selling short, leverage, program trading, swaps, arbitrage, and derived varieties, etc) and transposition, head of hedge, hedging to earn huge profits. The concept has been beyond the traditional prevent risk, security gains operation category. And to initiate and set up the hedge fund legal threshold is far lower than the mutual funds, to further increase the risk. In order to protect investors, north American securities management institution was included in the high risk investment products ranks, strictly limited in ordinary investors, such as hedge funds in each to less than 100 investors, the minimum investment of $1 million, etc.