[header] How to start a hedge fund [title] Learn the basics of a hedge fund. [step] Hedge funds are pools of investor money that use a large range of different strategies to both generate returns for investors and manage risk. Hedge funds are typically only available to sophisticated investors with large amounts of assets to invest (often over $1 million). 
[substeps] The term hedge fund comes from the practice of " hedging ", which is the practice of reducing risk in an asset by taking a position in a related security to offset any downward price movements. These related securities often take the form of derivatives like futures, options, and forward contracts.