At present, there is no unified definition of hedge fund, which is essentially a kind of mutual fund, but it has the following two particularities:

First, in the organizational form of funds, the number of fund investors is small, mainly in the form of private placement, so most hedge funds belong to private placement funds.

Second, in terms of investment, more leveraged financing is used to invest in financial derivatives such as options and futures. On the one hand, under the same market environment, the income of hedge funds may be obviously different from that of ordinary funds; On the other hand, the amplification of leveraged financing and financial derivatives can not only improve the expected return, but also increase the investment risk if used improperly.