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Could someone explain to me what a hedge fund is? How are people using hedges in oil (recent news). Confused!?

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Print article This entry was posted by admin on May 15, 2011 at 4:56 am, and is filed under Stock Trading. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site.
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  • Comments (4)
  • #1 written by es
    about 1 year ago
    Quote

    Most hedge funds are like mutual funds for the rich. The minimum investment may be $2 mil, for example. The manager then takes a large fee ( could be 20%) to manage a portfolio that is supposed to get great returns. They are hedged because they invest long ( expecting an investment to rise in price) and invest short (expecting some investments to fall in price, and making $ as it falls.)
    Hedging can be done by any investor, even a small investor. That is someone who controls risk by purchasing or selling options as well as holding stock, both long and short the market.

  • #2 written by jeff410
    about 1 year ago
    Quote

    Hedge funds are private investment funds with a certain criteria to accept investors. They are unregulated and limited to their number of investors, unlike mutual funds that are regulated by the SEC and virtually unlimited in the number of investors they accept. Although mutual funds do close to new investors at times. Mutual funds invest in stocks and bonds. Hedge funds invest in every part of the financial markets. stocks, bonds, commodities, currencies, futures and other things. And they can take long and short positions in any investment. So they can create complex hedging strategies. But they also use large degrees of leverage, with borrowed money, which create a great deal of risk. Mutual funds seek relative returns. Returns relative to an index such as the S&P 500. They seek to do better than the index, but that doesnt mean a positive return. Hedge funds seek absolute returns, positive returns no matter what the market does. Hedge funds typically charge a 2 percent management fee, and take 20 percent of the profits.

  • #3 written by raysor
    about 1 year ago
    Quote

    A hedge fund is a fund that will invest in anything. Short stocks, Legal outcomes, special situations, pre-IPOs, property, wine etc. The term hedge presumably comes from the fact that they will find an alternative investment (asset class) to equities, especially in a falling market.
    A hedge, maybe in oil is to try and counter any losses or potential losses that may occur in an investment you are exposed to. So if you require oil for your business, you would buy oil futures as a hedge against rising prices. If you are holding shares you could hedge potential losses by short selling the relevent index or maybre by buying Put options. Of course a normal hedge will prevent you making as good profits if the price moves the other way.

  • #4 written by Strategist
    about 1 year ago
    Quote

    Hedge Funds are pooled investment vehicles that are usually set up as private partnership.

    The difference between hedge funds and mutual funds is that hedge funds are higher risk because of the investment strategies that it undertakes.

    You can refer to the website below for types of hedge funds.

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How do i find an investment club in georgetown or DC? I am a talented investor and want to starta hedge fund.

about 11 months ago - 1 comment

Hedge fund vs Investment partnership?

about 11 months ago - 1 comment

Is there a difference between the two? In addition: http://www.bivio.com/index.html Is opening an account here the same as opening a hedge fund or an investment partnership? I know Warren Buffett began before Berkshire Hathaway the Buffett Partnership, is what is shown on this website similar?

where I can find co. RCA involve in hedge fund and stock investments?

about 11 months ago - 1 comment

Company is us based

is “hedge fund” a recognized term in securities legislations?

about 11 months ago - 2 comments

or is it an unofficial, loosely defined term to describe entities with certain characteristics?

Where can I learn about hedge funds?

about 11 months ago - 3 comments

Every website about hedge funds seems to want to sell me a fund or tell me how great their company is. Is there a site that explains hedge funds without a sales pitch?

What is the name of Edward Lampert’s hedge fund?

about 11 months ago - 1 comment

and who do I contact for information about the fund.

What’s a good major that could help me one day head a hedge/mutual fund?

about 11 months ago - 2 comments

Is it a Finance major? Or an MBA with a focus on Finance? Or something else?

Hedge Fund Manager David Tepper accused of insider trading. How much jail time do you think he’ll get?

about 11 months ago - 1 comment

hedge fund what is it?

about 11 months ago - 1 comment

I read with all this bail-out stuff going on that hedge funds could responsible what is a hedge fund and how does it effect the economy?

Why do hedge fund managers take money from people and offer high interest rates rather than taking a bank loan

about 11 months ago - 3 comments

I mean banks charge interest at maximum 15% per annum. But some of these guys promise returns of 25% and more! So why do they lose out that 10%? Why not simply borrow as much as is required from the bank?

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