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. In the most basic hedging operation, the fund manager buys a put option with a certain price and term 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. In another hedging operation, the fund manager first chooses a bullish industry, buys several high-quality stocks in this industry, and sells several inferior 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 exceed other stocks in the same industry, and the gain from buying high-quality stocks will be greater than the loss from shorting inferior stocks; If the expectation is wrong, the stocks of this industry will fall instead of rising, then the decline of the stocks of poor companies 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.

Hedge fund is one of many investment tools, and its investment purpose is still capital appreciation. In this respect, it is not much different from traditional funds. However, because the fund managers of hedge funds are relatively low-key, investors know little about hedge funds. However, since the financial turmoil, after Soros's quantum fund attacked many economic systems, most investors are pale. Hedge funds are characterized by having no certain investment objectives, unlike theme funds or regional funds, which have a clear investment route. Because of this, fund managers can handle investment strategies with full power, making the fund's movements difficult to touch.

Hedge funds originated in the United States in the 1960s, and were originally established to invest in stock instruments. But hedge funds can be bullish or bearish on different stocks, that is, on the one hand, they can buy a few stocks with good prospects, on the other hand, they will sell stocks with bad prospects. In 1980s, hedge funds added the elements of derivatives. The difference between hedge funds and ordinary stock or bond funds is that when the interest rate rise is unfavorable to the stock and bond markets, hedge funds can take the opportunity to short stocks or even borrow money to achieve leverage effect, thus enhancing the effect of investment strategies. Therefore, no matter whether the stock market goes up or down, hedge funds can seize the opportunity to make money for investors. Although investing in hedge funds seems to have many benefits, it is not suitable for ordinary investors, especially long-term value-added pensions and provident funds, because of its high risks.

Hedge funds can be roughly divided into macro hedging, event-driven, relative value strategy, quantitative trading, statistical arbitrage and so on.

Macro hedging focuses on the macro trend judgment ability of fund managers, that is, vision. Event-driven focuses on the information transmission ability of the collection department, and understands which enterprises in the world have the possibility of merger, repurchase and reorganization at the fastest speed, that is, in Erli. Relative value strategy is analytical power, which relies on the team's value judgment of stock price to buy undervalued stocks. The basis of quantitative trading is the technical comprehensiveness of profit model and the elasticity of data fluctuation, which is the weapon. Statistical arbitrage is the earliest hedge fund, which is embodied in the word hedging, buying some stocks and selling some futures. Its value lies in avoiding risks.

Specifically, hedge funds are different from traditional investment funds in several aspects:

1. The trading mode is flexible, which can not only analyze the operation according to the macro information surface, but also rely on the data model to judge the trend operation and rely on the value strategy operation.

2. It has a short selling mechanism. You can go long or short. When the market index is likely to fall, we can avoid the risk by shorting the stock index.

3. Leveraged trading model. That is, margin trading, spending 100 yuan to buy 1000 yuan of stocks, amplifying the income.

4. Avoid regulatory constraints. Compared with traditional investment funds, hedge funds are more free.