What are Hedge Funds, Futures and Options

Question

Accepted Answer

Hedge funds, futures, and options are financial instruments used for investment and risk management in the stock market.

Hedge funds are investment funds that use various strategies to generate high returns for investors.
Futures are financial contracts that obligate the buyer to purchase an asset or the seller to sell an asset at a predetermined price on a specified future date.
Options are financial contracts that give the buyer the right, but not the obligation, to buy or sell an asset at a specified price before a certain date.
Hedge funds typically have high minimum investment requirements and are only available to accredited investors.
Examples of futures include commodities like oil and gold, while options can be on stocks or indices.

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