What is the provision?

Hedging is an application of investment techniques to minimize the risk in the portfolio. This can be done by professional money managers and individual investors. There are many ways to ensure, but in principle it is a trade, setting or investing in an attempt to protect the investor from potential losses in another investment. In order to successfully ensure, there must be a second investment in negative correlation with the original trade or investment. This means that one investment produces revenues that exceed the revenues from wider financial markets, and the other investment that is located to secure is generally generated by revenues under the markets. Sophisticated business strategies and tools such as derivatives that include securities are designed to provide this layer of protection. Options are financial tools that provide investors for investors to buy or sell security at a given price before expiry date. These financial securities may be applied, among other thingsAnd many different asset classes, including shares, bonds and commodities.

Hedge funds are freely regulated, private investment portfolios containing investment of both institutional investors and wealthy individuals. They are operated by professional fund managers. Hedge fund managers receive layers of fees from large and small investors for the successful use of hedging strategies. A typical ratio for hedge fund administrators is a 2 % management fee and 20 % performance fee if the revenues are not interfered. If the Hedge Fund does not earn money to investors - these investment vehicles are designed to produce profits that are above the wider financial markets - then the tpopand for performance can be given up.

The locking fund manager applies a number of investment strategies to the hedge. Long/short capital is one of the most common of these styles of business styles. In this strategy ZajThe Fund administrator bet that the security will increase the value of the "long" value or buying shares. At the other end of this trade, there is another bet that other security decreases, a bet known as an abbreviation. Sometimes the Hedge fund manager is so sure that shares will drop, that he or he will add a debt to the store by lending money from the broker, but if the manager bet badly, this money must still be paid off.