Money Management Accounts

The best form of capital that any financial firm can gain, is from any Hedge Fund or Money Management Account that is directly under management.

A Hedge Fund - disregard the terminology - is basically a money management account. This means that a bunch of money is put together and is then used to trade stocks, bonds, futures, forex, whatever.

A fund or money management account (also known as a 'pool') is a tool for investing money in the market. The body responsible for trading this pool, is interested in earning a percentage of the gross profit generated from those trades. Some fund managers also charge a management fee (usually 1-2%). This fee is charged on the basis that there is overhead in managing the account; before it even makes a profit. It's also in place to assure that the fund manager collects a nice cut, right off from the start.

Funds that call themselves 'hedge funds', are only using the name for its artistic value. A "Hedge" is a trading strategy that basically means that when you're unsure of a result, you should take 2 sides of that bet. This is better shown in enterprise class companies, that have employees scattered around the globe, and hedge their currencies against each other. This is done so that when there's a huge shift in the Euro vs. Dollar, the company doesnt need to pay extra Dollars to cover the salaries paid for in Euros.

At the end of the day, all banking institutions, hedge funds and pool operators, trading advisors and money management account operators, basically try to do the same thing.