By: Vanmeet Talwar Hedge funds have evolved from the primitive investing techniques and revolutionalized the way fund managers utilize their resources to invest, manage and strive for superior returns on investments. Hedge funds implement many different techniques and tactics to efficiently allocate their resources mostly based on in-house research and valuable contacts. Common practices for hedge fund managers include one or a combination of short selling, leverage, hedging, arbitrage, futures and options, specific markets, position limits buy and sell targets stop-loss restrictions. Before getting into the crux of the matter, we need to expand on the basic practices which are mentioned above. These practices are employed to foster wealth accumulation for the fund and ultimately its investors. Let us take the example of short selling, where the brokerage firm borrows shares and posts some form of collateral as per the margin account requirement. Hedge fund managers short sell eith...