Hedging means buying stocks in the A-share market, but I am worried that the stock market will fall in the future, so I will make a corresponding number of short orders in the futures market or the options market, so that even if the stock market falls in the future, the backhand trading order will be the same as the buying order. Because our country's stocks can only buy up, and most of the fund's assets are invested in the stock market, there is no way to deal with it when the stock market falls, so hedge funds hedge the risk of the stock market falling well.

The characteristics of hedge funds are:

1, lever

When the value of hedge fund positions or assets exceeds the capital provided by investors, the leverage will be greater, about three times that of American hedge funds. Because fund managers can increase the size of their positions and enlarge their 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.

3. The handling fee is high.

Generally speaking, there are 2% management fees and 20% performance compensation fees.