When it comes to stock market investing, there is always confusion among budding investors whether they should start investing directly in stocks or go through mutual funds. If you are new to stock/ share market investing, you must first clarify what exactly are stocks and mutual funds and their differences as well.
Although both hedge funds and mutual funds pool money from different investors and invest such funds according to their own strategies in the financial market to make profits, however, their investor profiles, risks involved and tactics to generate returns are different from each other.
In this article, we will understand primarily the difference between hedge funds and mutual funds. But before we go ahead, let me explain first, what exactly hedge funds and mutual funds in brief so that their differences can be understood easily.
Although both private equity and hedge fund refer to the investment vehicle which pools money from different high net worth investors and utilises such funds according to their own strategies to generate returns for their investors. Such high net worth investors are known as limited partners.
In fact, both private equity and hedge fund have a similar category of investors, but there are some key difference between private equity and hedge fund if we consider their motive, strategies and methods of investment.
The private equity and venture capital can be the most popular and systematic ways to arrange capital fund at different stages of business. Venture capital provides the seed capital whereas private equity provides you with the growth capital. In fact, private equity and venture capital are similar in most contexts but there are some key differences in financing procedures, their risks and expectations.
The option contract is the contract between two parties which provide the rights not obligation to buy or sell the underlying securities/ assets on or before a future specified date at a predetermined price. Moreover, the options contract can be of two types: Call Option and Put Option.
In this article, we will discuss what are the call and Put Option and the difference between call and put option.