What is a Hedge Fund?

 

What are Hedge Funds?

A hedge fund is a fund raised from sophisticated investors that use strategies to have the best risk and return characteristics than other investments.

 

Common Hedge Fund Strategies

Some common hedge fund strategies include:

  • Leverage - Using borrowed capital to enhance returns
  • Short-selling - Making a bet that the value of a certain stock goes down
  • Derivatives - Buying an option, future or other financial instruments that derives its value from the value of a certain asset

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