First of all, understand what hedging is. Hedging means that the influence of a single factor on the prices of some two types of assets can offset each other. Hedge funds probably use various tools to offset the influence of uncertain factors, leaving some factors to gain income.

This expression is more abstract, let's tell an example to help understand:

1. For example, I know that both stocks and bonds are affected by macroeconomic and financial factors. However, the influence direction is different. Economic improvement or loose capital can stimulate the stock market to rise, while economic deterioration and loose capital are beneficial to the bond market. If only one factor is determined, the economy will improve. Not sure whether the funds are loose. So at this time, the uncertainty of whether the funds are loose or not is washed away, so the stock index bulls are established and the bond market bears are established. If the forecast of economic growth is successful, people who are bullish on stocks and bearish on bonds will benefit. The impact of funds is offset in two places. This is probably the embryonic form of hedge funds.

2. The actual situation of hedge funds may create a more complex hedge portfolio. There are more types of influencing factors and more types of assets, but the overall idea is similar. Because it uses a wealth of derivatives, it can bet on an impact factor. Profits and losses are relatively large.

According to my personal understanding of hedge funds, China doesn't. China and Public Offering of Fund can't be short. But there are abroad. The application of stock market hedging is to buy the most stable and best companies in the industry. Sell the worst company to make a profit.

There are several futures markets:

One is to buy raw materials or processed products and sell processed products or raw materials at the same time to make a profit.

2. Buy or sell short-term contracts and sell or buy long-term contracts to make a profit. In the foreign exchange market, it is usually when buying or selling a currency. Sell or buy another currency to make a profit.

The above is my personal opinion, for reference only, and I hope it will help you.