Paper Summary:

The paper discusses how hedge funds use short-selling, futures and other derivative products. The paper further explains that they provide one of the most diversified market activities within investment strategies since they can use a myriad of financial instruments and positions to reduce risk and maximize gains.

From the Paper:

"The original concept of a hedge fund is that it plays against the market, using short-selling, futures and other derivative products. Hedge funds provide one of the most diversified market activities within investment strategies since it can use a myriad of financial instruments and positions to reduce risk and maximize gains. Hedge funds minimize risk and the volatility of that risk via strategic diversification by selling long or short, buying and selling securities, engaging in opportunities on the futures or bond market. The development of a hedge fund was based on getting an absolute return in all directions. In practice this means that

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