The English name of Hedge Fund is Hedge Fund, which means "risky hedge fund". The purpose of its operation is to use financial derivatives such as futures and options, as well as the operational skills of buying and selling related stocks and hedging risks to avoid and resolve investment risks to a certain extent. We can give an example: in a basic hedging operation, a fund manager buys a put option with a certain price and timeliness after buying a stock. The utility of put option is that when the stock price falls below the option-limited price, the holder of seller option can sell his stock at the option-limited price, thus hedging the risk of stock decline. For another example, in another hedging operation, the fund manager first chooses a bullish industry, buys a few good stocks in this industry, and sells a few bad stocks in this industry according to a certain proportion. The result of this combination is that if the industry is expected to perform well, the increase of high-quality stocks will definitely exceed other inferior stocks in the same industry, and the gains from buying high-quality stocks will be greater than the losses from shorting inferior stocks; If the expectation is wrong, the stocks in this industry will fall instead of rising, then the decline of inferior stocks will be greater than that of high-quality stocks, and the profit of short selling will be higher than the loss caused by the decline of buying high-quality stocks. Because of this mode of operation, the early hedge fund can be said to be a form of fund management based on the conservative investment strategy of hedging. After decades of evolution, what is hedge fund has lost its original connotation of risk hedging, and the title of hedge fund is just an empty name. Hedge fund has become synonymous with a new investment model, that is, based on the latest investment theory and extremely complex financial market operation skills, making full use of the leverage of various financial derivatives, taking high risks and pursuing high returns.