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The "hedge" part of "hedge fund" is a misnomer. The defining feature is that they're lightly regulated.
by vostok 9y ago
The "hedge" part of "hedge fund" is a misnomer. The defining feature is that they're lightly regulated.
- zeusk 9y agoHistorically, "hedge fund" was named after a private fund that did pairs trade by shorting one security as they long other to hedge their losses in a downturn or broader market decline. Modern hedge funds use futures, swaps and derivatives to the same effect, hedge in "hedge fund" is in no way a misnomer and being lightly regulated is a direct consequence of them being limited partnerships which are not open to public or non accredited investors and not the other way round.