LONDON (Reuters) – Hedge funds are increasingly looking to derivatives to give them low-cost exposure to booming emerging market stocks, a global brokerage firm said on Wednesday.
Many hedge funds prefer to use derivatives such as contracts for difference because they only have to put up a margin of between 10 and 25 percent of the value of the securities.
“There has been an acceleration of hedge funds wanting to use CFDs for emerging-market stocks,” Fleur Gremmen, chief executive of brokerage firm Global Trader told Reuters.
