Hedging is to do two transactions in opposite directions at the same time. In this way, one loses money and the other makes money. On the contrary, one makes money and the other loses money. So you do hedging transactions, as long as the two orders are not settled, you will make a profit and you will not lose a penny. However, you will have to bear the handling fee for these two transactions. So it's not worthwhile in the end.

Subprime loan is a kind of subprime mortgage loan, which is aimed at individuals with poor credit status, no proof of income and repayment ability, and other heavy debts. Is it understandable that the interest rate of subprime mortgage is higher than the best interest rate for people with good credit? You are unlikely to pay back the money, so I will lend you more interest.

There are both risks and profits. As for the institutions that issue these loans, in order to get back the funds as soon as possible, they package these loans and issue bonds. Similarly, the bond interest rate of subprime loans is definitely higher than that of excellent loans. As a result, these bonds are favored by many investment institutions, including investment banks and hedge funds, because of their high returns.