liangfeng

it allows for more cost effective hedging techniques like OTC zero cost collars that you could structure with a trading desk... they have minimums for these types of transactions, so if you comingle your stock with your partners, you will be able to use derivatives to hedge more cost effectively...

liangfeng

One security? or many different types of low basis securities?


I am confused.

I thought there are many different types of securities, I mean company A, company B......then they pull together to diversify, because they diversify, thus sharing gain and loss together. At the end of the fund, they just pull their part and go home.



Am I correct?