Don't think of it like buying a stock on the spot market like retail investors typically do. Many hedge funds place their bets by using the options market, whic

Don't think of it like buying a stock on the spot market like retail investors typically do. Many hedge funds place their bets by using the options market, which limits the downside on a bad bet (see e.g. the butterfly strategy [1]). The size of the bet also depends on a lot of factors. Many hedge funds don't work like monolithic entities, rather they have a bunch of portfolio managers (PMs) who have their own allocated pools of assets from investors. These PMs decide on placing their bets based on lots of different things like their liquidity position (e.g. you don't want to lock up your cash in one position even if you're sure it'll make money when there's a risk of being margin called because of another trade) in addition to signals such as the one dicussed above. [1] https://en.m.wikipedia.org/wiki/Butterfly_(options) https://en.m.wikipedia.org/wiki/Butterfly_(options)