Hedging means creating a position that will guard against sudden and major market moves. Hedging reduces risk. Ironically hedge funds do not hedge. In fact, they employ extremely risky techniques of trading and often go bankrupt or suffer huge losses because of unhedged positions.
Hedge funds have always got bad press. Be it the British pound collapse of 1992 or the Asian currency crises of 1997, these funds have shouldered the blame.
These funds are known to increase the market volatility and whenever any disaster strikes , they come into the limelight. So, please hedge youself against hedge funds.
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