As a kind of fund, hedge fund has always had a sense of mystery. Other funds are a combination of stocks or bonds.

1. So what is a hedge fund?

The answer is: funds that use hedging transactions are called hedge funds, 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 instruments. It is a form of investment fund, which means "risk hedge fund". Hedge funds use various trading methods to hedge, transpose, hedge and hedge to make huge profits. These concepts have gone beyond the traditional operation scope of preventing risks and ensuring benefits. In addition, the legal threshold for launching and establishing hedge funds is much lower than that of mutual funds, which further increases their risks.

Second, talk about the risks of stock trading. Generally speaking, there are two risks in stock trading.

1 is the risk of the stock itself, mainly depending on the company's development;

2. Systemic risk is influenced by external factors, such as monetary policy, disaster and war, which can be understood as the trend of market index. This part of the risk is what hedge funds want to avoid.

Third, how do specific hedge funds operate?

The operation of hedge funds can be divided into two types, arbitrage or hedging strategy. Arbitrage mainly uses the price of stock index futures and the deviation value of the broader market to arbitrage. This paper mainly discusses hedging strategy. The strategy is simple. When buying stocks, short the stock index futures, or short the stocks of other companies of the same type to avoid the fluctuation risk of the industry and the fluctuation risk of the big environment. As long as this stock performs better than other companies in the same industry, you can make money in the process of stock market ups and downs.

Fourth, people's understanding of hedge funds now.

Now people generally believe that hedge funds are actually based on the latest investment theory and extremely complicated financial market operation skills, making full use of the leverage of various financial derivatives to undertake high-risk and high-yield investment models.