Hedge Fund

A hedge fund is an investment fund which specifically uses futures and options contracts to make money.

Originally the term described a fund that reduced its risks by covering the possibility of a fall in the value of the securities it held by holding others which would probably rise in value - usually futures or options contracts.

Now, many hedge funds operate in the futures markets without ever actually bothering to hold the underlying securities.

See Also: Online share dealing service Stockmarket Centre

Last Updated: August 2007 © Moneyextra.com

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