Hedge Formula – Scam or Not

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Hedge Formula Group Is Scam : True Review Revealed !!

This review is all about Hedge Formula Group scam that has hit the internet lately. The scam software is presented by one anonymous guy called George Dalio. He is also the alleged CEO of the so-called Hedge Formula System. He claims that his team members have worked so hard, and have come up with a very powerful app that can trade the financial markets with a high degree of accuracy, potentially making users up to 10,748 per day. According to Dalio, this Hedge Formula Group software is likely to make all users 30 million dollars richer in one year. He claims those figures are possible because he has made that much himself.

However, it’s expedient that we expose this scammer and his evil dealings to prevent him from further taking advantage of unsuspecting day traders who want to test the markets using software.

Hedge Formula Review ; Is Hedge Formula a scam?

We can say that we’ve found overwhelming reviews and evidence suggesting that one should not waste their time downloading this software. Yes, the Hedge Formula App requires you to download it into your hard drive to use it. It doesn’t scam people in the cloud -just in case you didn’t know.

The Hedge formula system is free like other fraudulent App’s in the market. But apparently, you’re rushed into signing up and downloading it because they don’t want to lose your precious $250 investment. The landing page of the Hedgeformula.co website has clearly stated that a few spots are available, and that those spots are fast running out, so if you close that page, there is no guarantee that you will get that opportunity next time.

Those statements sound very familiar and typical of scam workmanship. We are so used to them to the extent that it doesn’t bother us in anyway. The thing is, you will find slots today, tomorrow, the day after tomorrow and forever — as long as the Hedge Formula Group website is still live on the internet. And that’s when you’ll know it’s a sales tactic being employed by the team behind Hedge Formula to force people into signing up for their bogus signals.

Dalio and his Hedge Formula Team ! Exposed !

The truth is that Dalio is a fictitious character played out in acting. He was paid to claim that a company in the name of Hedge Formula Group existed, and that he is the CEO of that particular company.The plain truth is that this is a software that losses money by default. Hedge Formula signals are not supposed to be treated as signals because they aren’t generated by an algorithm. They are simply random movements in a simple chat used to fool people. No one has benefited from this scam before.

The only people benefiting from this Hedge Formula App scam are the affiliates that teamed up with a few brokers to earn commissions upon your signing up and depositing money. It’s a lucrative niche these days, although the trader is always the loser. In fact, if you do your research, you will realize that most of these scams don’t work with regulated brokers (although others are daring enough to team up with the most reputable in the industry).

We want to warn that anything is possible on the internet these days. So the Hedge formula App should not catch you by surprise when we tell you that it will sink all your investments into a pit where you won’t recover a dime.

More Scam Proof Against the Hedge Formula system !

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George Dalio;This man has presented several other scams on the internet as well, so it is not surprising that he can be found here as well. He presented the Click Cash formula as the CEO of the team who created the software. In this presentation, he used a different character, and not George Dalio. This was to conceal his chances of being discovered, and for sure, he has managed to make it difficult to trace him.

Thankfully, Dalio’s face is the same one that we are seeing across several scams on the internet. And in that case, how can we trust him with the Hedge formula system this time round? No way!!

Let’s give a small test here. Search for the name James Edwards or Click Cash Formula. What you will find is Dalio’s own face. That’s when you’ll know that this man is a con artist and a liar too.

Fake Hedge Formula Reviews & Testimonials !

No scam software will lack fake reviews or testimonials. In this case, we have an introduction Hedge Formula group video where the presenters are all paid actors. This is the norm today. You get someone on Fiverr or similar sites, you pay them and they will not have a problem lying on your behalf, so long as they have a decent video camera.

The people we are seeing in this Hedge Formula review video are the same people who have endorsed countless other scams on the internet. It is not possible that they are using all the apps they are endorsing. But it is possible that they got paid to endorse those trading apps.We hope you can see where this is getting us. Fake endorsements only belong to scam software, not legit ones. Furthermore, all trading and bank accounts you see in that video are fabricated, nothing to trust here!

The so-called HFG software Facts

You should not be surprised when we bring to your attention the fact that the HFG system is the same software being used by scams which we reviewed like Lie detector, Profits Infinity and so forth. It is only that the layout of the website has changed.It is also possible that all these apps are owned by the same individual.

Conclusion : The Hedge Formula App is Scam !!

Dalio will tell you that the Hedge Formula system is free and that you will never be asked your credit card or wallet. But believe it or not, after signing up for this bogus software, the first thing you’ll be required to do is to pay $250 on pretext that you’re investing. Be warned that this is the work of scammers.

How to Calculate Hedge Fund Returns

Taking fees into account is trickier than with mutual funds.

Hedge funds have become popular investments for those with high enough net worth or income to qualify as accredited investors. Yet although hedge funds promise the potential for market-beating returns, they also come with a fee structure that many investors haven’t experienced elsewhere. In particular, the performance-based incentives that hedge funds offer their managers can have a dramatic impact on your net return.

Simple hedge fund returns
Figuring out a hedge fund’s return prior to paying fees is typically fairly simple. Take the ending balance of your hedge fund account before it imposes its fees and divide it by the balance that you had at the beginning of the period. Subtract 1 and then multiply by 100, and the result gives you your percentage gross return from your hedge fund investment.

That’s similar to how you would calculate gross returns for any investment. Where things get tricky is taking fees into account.

The complexity of net returns on hedge funds
The challenge with hedge fund fees is that they typically come with two components. Most hedge funds charge a fixed fee based on a percentage of assets under management, and 2% annually is a typical figure. In addition, hedge funds also charge an incentive-based management fee, which is calculated as a percentage of profits above a certain benchmark return. A typical arrangement is to take 20% of all returns in excess of 5%.

To make things clearer, consider an example. Say that you invest $1 million in a hedge fund, and at the end of a year, your account is worth $1.2 million. Your simple gross return is $1.2 million divided by $1 million, or 1.2, minus 1. That gives you 0.2, which works out to 20%.

However, your net return will be much less. If the fund charges a 2% fixed fee, then you’ll pay $24,000 in fees at the end of the year. For the incentive fee, your account went up in value by $200,000, but the 5% benchmark rate means that you don’t have to pay the fee on $50,000 of it. An incentive of $150,000 multiplied by 20% adds another $30,000 to the total cost of the hedge fund. Subtract both fees, and you’re left with a final net account balance of $1.146 million. That corresponds to a net return of 14.6%.

Note that the net return is substantially less than the gross return — more than five percentage points less in our example. That reflects the importance of understanding fee structures. Many hedge funds take huge fees that have a dramatic downward impact on investor returns.

Hedge funds have become popular because investors hope for big successes. Yet you have to be prepared for the fund managers to take a large cut, and if you don’t account for a substantial drain on your net return, you’ll end up disappointed.

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Hedge Ratio

Hedge Ratio Definition

Hedge ratio is defined as the comparative value of the open position’s hedge with the position’s aggregate size itself. Also, it can be the comparative value of the futures contracts that are purchased or sold with a value of cash commodity that is being hedged. Futures contracts are an investment vehicle which allows the investor to lock the prices of the physical asset under consideration at some point of time in the future.

Hedge Ratio Formula

Given below is the formula of Hedge Ratio:

  • Value of the Hedge Position = Total dollars which is invested by the investor in the hedged position
  • Value of the total Exposure = Total dollars which is invested by the investor in the underlying asset.

The hedge ratio is expressed as the decimal or the fraction and used for quantifying the amount of the risk exposure that is being assumed by a person by remaining active in a trade or an investment. With the help of this ratio, an investor can have an understanding of their exposure at the time of establishing a position. The ratio of 0 means the position is not at all hedged and on the other side the ration of 1 or 100% shows that the position of the person is fully hedged.

When the hedge ratio of the investor approaches towards 1.0 then it shows that their exposure with respect to the changes in underlying asset value goes down and when the hedge ratio of the investor approaches towards zero, then the position will be an un-hedged position.

Hedge Ratio Example

Mr. X is the resident of the United States and is working there only. He has the surplus amount and wants to invest the same outside the United States as he is already having a good amount of investment in his home country. For the new investment, he conducted some study of the different foreign markets and after studying he found that the economy of country India is growing currently at the faster pace which is even more than that of the United States.

So, Mr. X decides that he would participate in the Indian market which is having higher than domestic growth by constructing a portfolio of the equities having the Indian companies in that amounting $ 100,000. But due to this investment in a foreign country, the currency risk will arise as there is a currency risk involved whenever investment is done in non-domestic companies. So there is a concern of the investor over the devaluation of rupees against U.S. dollar.

Now in order to reduce the foreign exchange risk, the investor decides to hedge $ 50,000 of its equity position. Calculate the hedge ratio.

  • Value of the Hedge Position = $ 50,000
  • Value of the total Exposure = $ 100,000

So the calculation is as follows –

Thus the hedge ratio is 0.5

Advantages

There are several different advantages of this Ratio providing the opportunity for the investors. Some of the advantages of the Hedge ratio are as follows:

  • Parties which are involved in the practices of the aggressive hedging use hedge ratio as the guideline for the purpose of estimation and optimization of the performance of the asset.
  • The hedge ratio is easy to calculate and evaluate as it involves the use of the two parameters which are Value of the Hedge Position and the value of the Total Exposure
  • With the help of the hedge ratio, an investor can have an understanding of their exposure at the time of establishing a position.

Drawbacks / Disadvantages

Apart from the advantages, there are different limitations and drawbacks which includes the following:

  1. Sometimes there are situations when the futures are not present in the currency in which hedger has the exposure. This leads to currency mismatch.
  2. Hedge ratio calculated should be close to the unity for attaining the perfect hedge, when calculated in the same currency. In other words, perfect hedge in a futures contract is the same as underlying currency exposure. However, in real practice achieving perfect hedge is quite difficult.

Important Points

  • It is used by the investors for comparing the amount of the position that is being hedged with respect to the entire position of the investor.
  • The ratio of 0 means the position is not at all hedged and on the other side the ration of 1 or 100% shows that the position of the person is fully hedged. When the hedge ratio of the investor approaches towards 1.0 then it shows that their exposure with respect to the changes in underlying asset value goes down and when it approaches towards zero, then the position will be an un-hedged position.
  • The hedge ratio is hedged position which is divided by total position.

Conclusion

Hedge Ratio is the mathematical formula which compares the value of the proportion of position which is hedged to a value of the entire position. It helps the investor in understanding their exposure at the time of establishing a position. Like, if the hedge ratio that an investor has calculated comes to .60, then it shows that the 60 % of the investment of the investor is protected from the risk, while the remaining 40 % (100 % – 60 %) is still exposed to the risk.

It is used for identifying and minimizing the risk present in the contract. Parties which are involved in the practices of the aggressive hedging use hedge ratio as the guideline for the purpose of estimation and optimization of the performance of the asset.

This has been a guide to what is Hedge Ratio and its definition. Here we discuss the formula of hedge ratio along with the example, advantages, and disadvantages. You can learn more about ratio analysis from the following articles –

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