Does the future of exchange hedge funds matter?
The so-called hedge fund refers to the fund that adopts the means of hedge trading, also known as hedge fund or hedge fund. So what are the foreign exchange hedge funds related to foreign exchange investment?
First of all, we need a basic understanding of hedge funds, that is, hedge funds are a form of investment funds, which refer to the financial funds for profit after financial derivatives such as financial futures and financial options are combined with financial instruments. Hedge funds are more aggressive in their investment methods and pay more attention to managing the total risk of investment funds rather than pursuing relative performance. It is a form of investment fund, meaning "risk hedge fund". Hedge funds use a variety of trading methods to hedge, transpose, hedge, to earn huge profits. These concepts have gone beyond the traditional operational category of risk prevention and revenue protection. In addition, the legal threshold for the initiation and establishment of hedge funds is far lower than that of mutual funds, which further increases the risk.
In order to protect investors, the securities regulatory agencies in North America put it into the list of high-risk investment, strictly restricting the ordinary investors to intervene. If it is stipulated that the number of investors of each hedge fund should be less than 100, the minimum investment amount is 1 million US dollars, etc. With the passage of time, in the financial market, some fund organizations use financial derivatives to take a variety of profit-making investment strategies, which are called hedge funds. Hedge funds have long lost the connotation of risk hedging. On the contrary, it is generally believed that hedge funds are actually based on the latest investment theory and extremely complex financial market operation skills, making full use of the leverage effect of various financial derivatives to undertake high risks and pursue high returns. The exchange hedge fund is a kind of fund that uses foreign exchange to carry out hedge trading. The exchange hedge fund includes pure monetary fund, exchange cash fund, exchange futures trading fund, macro fund, carry trade fund and arbitrage fund.
Among them, the monetary fund is the most common one, which gains profits by speculating on exchange rate fluctuations. Both futures trading funds and macro funds are relatively easy to understand, while carry trade funds are arbitrage profit-making funds that are financed in low interest countries and then reinvested. For small retail traders, arbitrage is more said than done. Arbitrage is mainly for large players, and arbitrage is very fast and profitable. But the risks can't be underestimated. In fact, I don't know much about foreign exchange fund trading, so it's hard for you to know about hedge fund trading.
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