Hedge Fund 101 (1)
Funds that use hedging instruments are called hedge funds, also known as hedge funds or hedge funds.
It is a financial fund that combines financial derivatives such as financial futures and financial options with financial instruments for the purpose of making a profit.
It is a form of investment fund, which means "risk-hedged fund". Hedge funds use a variety of trading techniques to hedge, swap, hedge, and hedge to make large profits. These concepts go beyond traditional risk prevention and return protection operations. The risks are further exacerbated by the fact that the legal thresholds for launching and establishing hedge funds are much lower than those for mutual funds.
In order to protect investors, North American securities management agencies have included them in the ranks of high-risk investments, strictly limiting the involvement of ordinary investors. For example, it is required that each hedge fund should have fewer than 100 investors, with a minimum investment of $1 million.
People refer to financial futures and financial options as derivatives, and they are often utilized in the financial markets as a means of hedging and risk avoidance.
Over time, in the financial markets, some IMFs have used financial derivatives for a variety of profit-oriented investment strategies These fund organizations became known as hedge funds. Hedge funds have long since lost the connotation of risk hedging; instead, it is now widely believed that hedge funds are actually based on the latest investment and financial news. theory and extremely sophisticated financial market techniques, taking full advantage of the leverage of various financial derivatives, taking high risks, pursuing A high-yield investment model.
Origin and development
Hedging is an act or strategy designed to reduce risk. Hedging commonly takes the form of trading in one market or asset to hedge risk in another market or asset, for example. A company purchases a foreign exchange option to hedge the risk that fluctuations in spot exchange rates will have on its operations. The person who conducts the hedge is known as a hedger or a hedge (Hedger).
Hedge funds originated in the United States in the early 1950s. At that time, the purpose of the operation was to use financial derivatives such as futures, options and other financial derivatives, as well as short purchases and sales of different stocks associated with the risk The technique of hedging, to a certain extent, can avoid and mitigate investment risk.In 1949 the world's first limited Cooperative Jones hedge fund.
Although hedge funds have been around since the 1950s, they have not attracted much attention over the next 30 years Concerned that it wasn't until the 1980s, with the development of financial liberalization, that hedge funds became more widely available for investment, and from then on In the 1990s, the threat of world inflation gradually diminished, while financial instruments increasingly Mature and diversified, hedge funds have entered a booming phase.
