What do you mean by speculation in foreign exchange hedge funds? How does hedge fund risk control work?
Hedge fund is a kind of fund which uses hedge trading means, also known as hedge fund or hedge fund. So what do you mean by speculation in foreign exchange hedge funds? How does hedge fund risk control work? Today I'd like to give you a detailed introduction to exchange hedge funds.
What do you mean by speculation in foreign exchange hedge funds?
1. Hedge fund is a way of investment fund. The financial fund which combines financial derivatives such as financial futures and financial options with financial instruments is for profit. Hedge funds are more radical in means, especially concerned about the risk of investment funds, not the pursuit of performance.
2. Foreign exchange hedge fund is a kind of fund which uses foreign exchange to carry out hedge trading. 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.
How does hedge fund risk control work?
1. Short. There are many details. For example, the U.S. market requires that the bank should be informed and the location code should be provided before the transaction. The larger fund system will automatically complete it, and the small compliance department will call to ask.
2. Whether each transaction is justified and whether the allocation is fair. Regulations tend to be more stringent: Europe will even need to keep the relevant telephone voice records before and after the transaction in January next year for the regulatory authorities to spot check
3. Various quotas. The trading quota of the fund in the corresponding products of the bank, the trading quota of the currency, the corresponding quota of the traders, etc. Generally speaking, the trading department has an automatic inspection system.
4. Conflict of interest. For example, if the client is an Italian bank and the investment strategy transaction involves holding the company of the bank, the registered orders allocated to the fund cannot be executed. For example, if a fund is a trust investment for Merrill Lynch Securities, the transactions involving the fund are basically not traded with the brokerage services of Merrill Lynch.
5. Customer requirements, for example, investors just don't like the Japanese market (maybe this fund is used to hedge risks). Sometimes, the transaction of investing in a Japanese Listed Company calculated by the core macro strategy can't be executed.
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