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.
In order to protect investors, North American securities regulators listed it as a high-risk investment product and strictly restricted the involvement of ordinary investors. For example, it is stipulated that each hedge fund should have fewer than 65,438+000 investors, and the minimum investment is 654,380+000 million dollars.
People call financial futures and financial options financial derivatives, and they are usually used as a means to hedge and avoid risks in financial markets.
With the passage of time, in the financial market, some fund organizations use financial derivatives to adopt various profit-oriented investment strategies. These fund organizations are called hedge funds. Hedge funds have long lost the connotation of risk hedging. On the contrary, it is generally believed that hedge funds are actually based on the latest investment theory and extremely complicated financial market operation skills, and make full use of the leverage of various financial derivatives to undertake high-risk and high-yield investment models.
It is still uncertain which is the earliest hedge fund. During the great bull market in the United States in the 1920s, there were countless such investment tools specifically for the rich. One of the most famous is the Graham-Newman Partnership Fund founded by Benjamin Graham and Jerry Newman.
1923 The novel Memoirs of a Stock Market Maker describes a speculative tool called "asset pool" when recording Jesse Livermore's brilliant achievements, which is very similar to the so-called "hedge fund" in form and function. Before Livermore, bernard baruch also managed an "asset pool". Later, he set up another portal and made a fortune. He was called "the lone wolf on Wall Street" and became a politician.