Hedge Fund Strategies

What this video covers

• Why “hedge” does not mean safe or conservative, and why modern hedge funds may use aggressive speculative strategies
• How private offering exemptions and accredited-investor standards connect hedge fund access with the ability to bear high risk
• How mutual funds and hedge funds differ in short selling, leverage, derivatives, concentration, and illiquid assets
• How short selling works from borrowing shares through repurchase, and why losses are theoretically unlimited when the price rises
• How two-times leverage converts a 10% gain into a 20% gain and a 10% loss into a 20% loss on invested capital
• What derivatives, concentrated positions, global macro, and long/short equity strategies are designed to do
• Why long/short equity is the historical source of the word hedge, even though many modern hedge funds increase risk