Wednesday, November 09, 2005

Derivatives on hedge funds

Derivatives on hedge funds: based on a hedge fund, a fund of funds, or a customized, actively managed basket of hedge funds.

The beauty of derivatives is that you can structure one on practically any underlying having an associated risk profile. As the IDD article: Derivatives Markets Swallow Own Tail? says "These days, the derivatives markets are becoming so pervasive that they bring to mind the ancient Greek symbol Uroboros, the snake that swallowed its own tail"
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