Hedge fund strategies: Long short 1 | Finance & Capital Markets | Khan Academy

Setting up a simple long-short hedge (assuming the companies have similar beta or correlation with market). Created by Sal Khan.

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Finance and capital markets on Khan Academy: Hedge funds have absolutely nothing to do with shrubbery. Their name comes from the fact that early hedge funds (and some current ones) tried to "hedge" their exposure to the market (so they could, in theory, do well in an "up" or "down" market as long as they were good at picking the good companies). Today, hedge funds represent a huge class investment funds. They are far less regulated than, say, mutual funds. In exchange for this, they aren't allowed to market or take investments from "unsophisticated" investors. Some use their flexibility to mitigate risk, other use it to amplify it.

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[carlottabertolino]

Clearest video I've seen so far about market neutral strategies. First time I did not feel like I needed a degree and 10 years experience to understand. thank you

[Chuks]

I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Laurie Siebert.

[Alezander]

dude what happened with napoleon ? are u going to continue his story or not ?

[willfowls]

long short the same asset seems more sensible as B is unrelated to A - makes sense to buy A and short A - given you expect A to decrease from current price within 3 months, but expect it to trade over current price in 3 months to 6 months - A is related to A - even if A and B are in the same sector there are too many non-shared variables...

[mesa]

i started trading with only 2000 bucks...its never too small to start..

[NEVERGIVEUP-hiem]

Do they use derivatives market to make such profits?

[yxoixtr]

I actually did the same trick in the stock market but was confused about its effectiveness，thanks for this video which confirms this practice and boosts my confidence！

[LoffysDomain]

1:13 what does "short a company" mean. (Beginner.)

[freegiftcardglitch]

If a went up, would go down if b went up a would go down basically risk free trading as only these 2 things can happen

[kingtigercrownestate]

It seems like hedge funds would always just wind up breaking even on this kind of strategy if they gain as much on one as they lose on the other.

[yeakubaliakthar]

Ummm I'm 11 can someone break this down to me

[brandonc]

I think this guy does those math videos.

[zaccy]

So lets say you are completely wrong. B gets dumped and A goes up. Are you now rekt?

[gatersaw]

This is THE ONLY way to trade if you want to accumulate wealth.

[quantstyle]

Stocks without dividends meet the SEC’s definition of a Ponzi scheme. Profits come from other investors, not the company. Look up “The Ponzi Factor”

[anonimu]

Maybe you explain to us, we are fools

[helengranterliech]

Little too risky in my book. Forget about hedge funds, it's 2013 now Low Risk and good yields like penny

Stocks are the way to go wellsbee.com provides some good picks in the current

market.

[yjlqbqi]

So lets say you are completely wrong. B gets dumped and A goes up. Are you now rekt?