For example, if the steamed buns in your community breakfast shop are delicious and cheap, as long as one yuan, and you find that the steamed buns with similar taste in front of your school cost five yuan, and people are still eating them every morning, you want to transport the steamed buns in your community to the school for sale, so don't you make a net profit of four yuan each? There is no same product to seek the price difference between two different markets, which is arbitrage. It sounds very profitable, but it is risky. Because the school is a completely competitive market, the price of steamed buns will fluctuate. It is possible that the owner of the steamed stuffed bun shop is lovelorn. The steamed buns made today are not delicious, and they can only be sold for one yuan at school. It is possible that there is a fried dough sticks beauty shop next to the school. Everyone goes to eat fried dough sticks and can't sell any steamed buns, so this batch of steamed buns will fall into their hands. There is a steamed bread trading group in the school, and tomorrow's steamed bread will be traded here. Customers are worried that the price of steamed bread will rise tomorrow, so they can't eat cheap steamed bread, so they order steamed bread in advance. Merchants are worried that the market for steamed bread will be bad tomorrow, so the contract for selling steamed bread will lock in profits in advance. Isn't this the steamed bread futures market? Yes, you can buy more buns in the community and sell them short at school. Steamed bread contract Every time you buy a steamed bread, you sell a contract. In this case, once you lose money in the spot steamed bread, your steamed bread contract can start to make money, so that the risk can be washed away and there is no risk arbitrage. The essence of hedging is to find two opposite things to offset each other, drinking milk tea during the day and going to the gym at night. This is called hedging. About the joke about the people, 80% of the funds buy 20% insurance, which is also a hedge. Oh, by the way, no matter whether the customer is steamed stuffed bun or fried dough sticks, there is no loss. What is a hedge fund? What's the difference with the fund I usually buy? Or selling steamed buns can hedge risk-free arbitrage. The steamed bread business is very profitable. You want to make it bigger, but what if the money is not enough? So you became a steamed bread, and the hedge fund found a rich Pharaoh. Lao Wang said, why don't you invest in such a profitable business? Therefore, the first investment is 654.38 million yuan, which is the first characteristic of hedge funds. Fund promoters must participate in shares. Lao Wang said, I admire you very much You said no to the first five dollars. This is a big business, and I invested 654.38+0 million. The second feature is that the entry threshold is high. Lao Wang said that too many people can't make money with me, so you and Lao Wang limited the fund size to 100. The third step, public offering, strictly limit the scale. In order not to let Lao Wang tease you, you take out the funds today and tomorrow. The total amount of hedge funds has a great influence on the operation, so it is stipulated that funds cannot be withdrawn at will, and they can only be redeemed at some time every year. This is the first step. You will be anxious when Lao Wang's redemption limit is set. Everyone in the fund said that I can't let you know the secret of making money, but I can help you make money. The fifth characteristic of hedge funds is to pursue absolute interests and use all legal financial instruments, but the operation is not open. And you said I was so handsome. I will accept 20,000 yuan for your investment 1 10,000 yuan, and I will accept 20 yuan for the profit after deposit. Hedge funds in a broad sense can not only hedge, but also carry out risk-free arbitrage. It is possible that the steamed stuffed bun contract is very profitable. You don't go to the community to buy steamed buns at all, and it's easy to explode with high leverage to fry steamed buns contracts.