Hedge fund is a kind of fund with risk hedging. Simply put, it is to minimize risk hedging on the basis of maximizing profits. For example, a hedge fund manager is optimistic about the future trend of gold, so he is long in gold. On the other hand, because gold is highly correlated with the dollar, he makes more dollars while making more gold to hedge the risk that gold may fall. For another example, a financial giant is optimistic about the future trend of the RMB. However, due to the inconvenient circulation of China's capital account and the close economic ties between China and Australia, on the one hand, Australian dollar assets were greatly blessed, but on the other hand, in order to hedge the risk of China's economic weakness, forward put options of RMB were bought in the offshore market to hedge the risk.

As for arbitrage, it is even simpler. For example, the current market price of an ETF fund in a stock market is 1 1,000 yuan, which consists of two stocks, A and B, each accounting for half. Assume that the market value of A and B shares on that day is 500 and 450 respectively. 500+450 = 950 & lt； 1000, then there is 50 arbitrage space. You can buy AB shares and short ETF funds. For another example, a ton of copper in London costs $6,000, a ton of copper in China costs $7,000, and the tax on transporting copper from Britain to China costs $600, leaving room for arbitrage of $400. You can make duolun copper and short Shanghai copper at the same time. Or buy copper directly from the London spot market and ship it to the Shanghai spot market for sale.