Hedge fund: a fund that uses hedging transactions.

What is a hedge fund?

Hedge funds refer to funds that use hedging transactions, also known as hedge funds or hedge funds. It refers to a financial fund that aims at profit after financial derivatives such as financial futures and financial options are combined with financial institutions.

Several hedging models:

(1) Stock index futures hedging

(2) commodity futures hedging

(3) Statistical hedging

(4) Option hedging

Characteristics of hedge funds

① leverage

Leverage is greater when the value of hedge fund positions or assets exceeds the capital provided by investors. Because the fund manager can increase the size of the position and enlarge the income, the greater the leverage, the higher the potential income and performance cost.

② It can be short.

Because our A-share market can only buy up, when fund managers predict the stock market decline, hedge funds may short financial derivatives and make a profit.