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What does a hedge fund mean?

What does a hedge fund mean? A hedge fund is a form of investment fund, meaning “risk hedged fund. Hedge funds use a variety of trading means to hedge, transposition, hedging, hedging to earn huge profits.

Three characteristics of hedge funds

One, hedge funds generally have a certain amount of leverage, so if you take over $1 billion, you might actually take over $2 billion, you might take over $10 billion.

Second, the concept of hedge fund is mainly relative to mutual fund. A hedge fund can go short, but it doesn’t have to. Now there are some funds that are only long term and can use index derivatives to hedge if they feel the market is bad, but they are not required to hedge, they have the opportunity; But mutual funds can’t do that.

The third feature is that hedge funds usually have high fees. Generally speaking, there is a 2% management fee and a 20% sharing fee. There are also various types of hedge funds. Some specialize in stocks, and there are two ways to do stocks: One is only long-term stocks, where the market is good, he goes where, hoping to find out the best piece of the market every year; The second one is long and short. For example, if you have $1 billion, you go long with $1 billion, short with $500 million, or short with $300 million, which is also one kind. In addition, there is a comparative quantitative, such as the use of some statistical models.