Hedge Funds An Analytical Perspective Translator s Preface

1. The use of hedging trading methods is called hedging, also known as hedging or hedging, which refers to the combination of financial derivatives such as financial options and financial instruments for the purpose of profit. It is a form of investment, which means "risk hedged";

2. In finance, hedging refers to an investment that deliberately reduces the risk of another investment. It is a way to reduce business risk while still making a profit from the investment. Generally, hedging is to carry out two ** related, opposite directions, equal amounts, and break-even transactions at the same time.

If you lose less and make more, you can still make a profit for the whole old Qingti.

As an investment method and investment strategy, in the investment market, many investors have obtained satisfactory expected returns because of hedging. Many friends find that they still don't understand what he's doing after learning about hedging, and today I will take you to talk about the popular explanation of hedging, and give a simple and easy-to-understand example, let us understand it thoroughly!

Hedging** popular explanation

It is said that hedging is hedged, so how is it hedged? Let's start with hedging.

Hedging can be understood as an investment that the investor deliberately buys in the opposite direction of another investment to reduce the risk from the investment; In general, hedging is to carry out two transactions in opposite directions, in equal quantities, **correlated, and offsetting profits and losses at the same time.

Isn't it a general understanding? Let's give specific examples.

For example, you buy 1 lot (100 shares) of A**, but you are afraid of the excessive risk, so you buy 1 lot of B** in the opposite direction (strategy, **, nature, etc.) to A**.

The advantage of this is that when A**** is not good, B** will be better because of the opposite, and the money of A** who loses can be offset by B**'s profitable money, which is essentially an investment strategy.

Once you understand hedging, hedging** is easier to understand.

To put it simply, hedging is one done by the manager according to the above hedging method, that is, buying two opposite ones (put or call) at the same time to achieve risk hedging.

The use of hedging trading methods is called hedging, which is a form of investment, which means "risk hedged". In trading and investment, a certain cost is used to "offset" the risk to obtain a lower or no risk profit, which is the so-called "arbitrage".

Hedging, a form of investing. It is an exempt market product. Hedging is called "name", which is actually fundamentally different from the investment concept of reciprocity, safety, income and value-added.

This kind of ** uses various trading methods (such as short selling, leverage operation, program trading, swap trading, arbitrage trading, derivatives, etc.) to hedge, transposition, hedge, hedging to earn huge profits. These concepts have gone beyond the traditional operations of risk prevention and return protection. In addition, the legal threshold for initiating and setting up hedging** is much lower than that of reciprocity**, which further increases the risk.

In order to protect investors, the North American ** management agency will include it in the ranks of high-risk investment varieties, and strictly restrict the participation of ordinary investors, such as stipulating that each hedge ** investor should be less than 100 people, and the minimum investment amount is 1 million US dollars. For example, in a type of hedging operation, the manager first selects a certain type of bullish industry, buys several high-quality stocks that are optimistic about the industry, and at the same time sells a few inferior stocks in the industry at a certain ratio. The result of this combination is that if the industry is expected to perform well, the high-quality stocks will rise more than other inferior stocks in the same industry, and the gains from high-quality stocks will be greater than the losses caused by shorting the inferior stocks; If the expectation is wrong, and the industry does not rise but falls, then the decline of inferior stocks must be greater than that of high-quality stocks, and the profit from short selling must be higher than the loss caused by high-quality stocks.

Because of this means of operation, early hedging can be said to be a form of management based on a conservative investment strategy based on hedging and hedging.

Hedge fund, simply put, refers to the strategy of using (excess) returns to offset investment losses, that is, "hedging risk", which can also be called hedging or hedging.

Due to the complexity of its hedging strategy and the lack of related systems, hedging is not common in China, but it is more common abroad, such as the well-known Soros "Quantum**", Robertson "Tiger**" and Bridgewater**, etc., are internationally famous hedging**.

Hedging is the risk hedging, simply put, the risk is hedged to the minimum on the basis of maximizing profits.

Hedging** refers to the combination of financial derivatives such as financial ** and financial options with financial instruments for the purpose of profit.

The word hedging originated in the United States in the 50s of the 20th century, and it is a form of investment **, which means:"Risk hedged**"It is an investment tool that can provide a risk-return portfolio that is different from traditional ** bond investment.

There are several types of hedging:

Spot hedging, intertemporal hedging, inter-market hedging, and cross-product hedging.

**The features are as follows:

1. The high liquidity of hedging makes it easy to use the assets in hand to make mortgage loans, for example, 100 million US dollars can lend up to billions of dollars by repeatedly mortgaging its ** assets.

2. The investment objective of hedging ** is relatively vague, and theoretically you can invest in any asset class, including but not limited to, **, ** and a variety of financial derivatives and instruments.

3. Hedging** usually charges a 2% management fee and a 20% handling fee.

4. Hedging** is different from other common**, it is generally initiated through private placement, and cannot use any media for advertising.

5. Unlike the traditional one, hedging has the obligation to disclose the status to the relevant regulatory authorities and the public.

Hedging** is risky, mainly from leverage risk, strategy risk, short selling risk, lack of transparency and lack of regulation. It is precisely because of its relatively large potential risks that it is defined as a kind of private placement, rather than a common public offering.

Simple means don't overcomplicate it. 7533