2. Hedge funds, also known as hedge funds or arbitrage funds, refer to financial funds that combine financial derivatives such as financial futures and financial options with financial institutions, and use high-risk speculation as a means to make profits.
To put it bluntly, shorting means making money even if the market falls. For example, in the most basic hedging operation. After the fund manager bought a stock, he also bought a put option with a certain price and time limit. 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.