Hedge funds don't have four basic special tools, usually four ways of buying and selling. The buying and selling methods of hedge funds can be summarized into four categories, namely: stock index hedging, futures trading hedging, statistical analysis hedging and stock index futures hedging. These are the four basic tools of hedge funds.

Introduction of hedge fund trading model

1. Stock index futures hedging refers to the personal behavior of buying and selling stock index and spot stock market at the same time by using the unreasonable price of stock index futures trading market, or trading stock index value contracts with different maturities and different types but similar types at the same time to obtain the difference income. Stock index futures arbitrage can be divided into cash hedging, inter-period hedging, inter-regional hedging and cross-category hedging;

2. Futures trading has hedging countermeasures. While buying or selling a certain option contract, selling or buying another related contract, at a certain time, at the same time, both contracts are forced to close their positions;

3. Statistical hedging is a kind of risk arbitrage, which uses the law summarized from the statistics of historical securities prices to obtain income. This kind of risk is generally that the law of historical price statistics may change in the future, and the same law may not always exist;

4. The advantage of stock index futures lies in the limited risk damage to profits. Therefore, in many cases, using stock index futures instead of futures trading for bearish and hedging arbitrage trading will have less risk and better returns than simply using futures arbitrage.

This paper mainly writes the knowledge points of the four basic tools of hedge funds, and the content is for reference only.