Thursday 6 October 2011

Most Use Hedging Techniques You Should Know

By Mas Komar


For some people, hedge fund can be a good choice of investment to gain some profit, and make a good portfolio. Yet, for the rest of the people, hedge fund is just like any other type of investment, which brings nothing but losing money. There are positive and negative perspectives happening in the modern society these days about hedge funds. That is why, it it important for hedge fund management team to be able to show to the public that they competent to run the business.

Hedge fund investors required having some net minimum for their investment capital, and they need to have good, proven trading techniques that can be use in trading the market using hedge fund tactics. Investors need to have at least couple years of experience trading other type of financial market before they are going into investing in hedge funds.

Today, not only the big player who can make investment in hedge funds, regular common traders can also participate in this business because it is available for public too. It is just, for the regular type of traders who do not have millions to invest in this business; they need to pay more for the commission on each transaction they make in hedge funds.

Here are some proven methods for hedge fund investment in regular markets;

Making covered call in option trading is definitely one of many ways where people can have on-going profit day in, day out. This also the exact method many hedge fund managers are currently using to improve their client's profit. The idea behind this method is to make small profit everyday, and convert them for bigger investment later on.

Hedge fund managers often taking advantage on markets that are proven easy to be trade and profit from to build their client's portfolio in the market. Many people are elevating their profit by using the Exchange Traded Fund (ETF) while investing in hedge fund.

Other tactic is by using what called Quant Trading. It is simply a non-mathematical formula, which we often see, in technical analysis. It is virtually work the same way with technical analysis, but it is just more complicated in terms of calculation of price and risks.




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