Exposure
Gross at 240%
The book is 155% long, 85% short. Net looks conservative; gross does not. The prime broker has just raised margin requirements on your two largest shorts.
All simulators
Long/short, exposure and liquidity
Hedge Fund simulator
Your seat: Long/short book, multi-strategy fund
Net exposure describes your view; gross describes how much can go wrong at once. Squeezes, factor unwinds and redemptions all arrive on the same day.
What you'll learn
- The difference between net and gross exposure, and which one hurts
- How crowded shorts and factor unwinds turn stock picks into one bet
- Why liquidity, not conviction, decides who survives a drawdown
Who it's for
Long/short equity, multi-strategy and risk seats.
It works as interview prep: you'll have made the calls an interviewer asks about, and seen what happens when you get them wrong.
Decisions from your first year
Three calls a year. Here's the kind of thing that lands on your desk before your first promotion.
Short book
The short that is going up
A heavily shorted name has doubled in nine sessions on no fundamental news. Days-to-cover across the market is nine. Your position is 4% of the fund and rising.
Transition trade
Short the laggard, long the leader
You want to be long a grid-equipment maker and short a refiner with no transition plan. The refiner is generating record free cash flow and buying back stock.
The ladder
Each rank has its own bar for returns and standing. Clear both to move up.
- Junior PM
- Portfolio Manager
- Senior PM
- Sector Head
- Head of Equities
- Founding Partner
Terms you'll use
- Redemption
- Investors withdrawing capital from an open-ended fund.
- AUM
- Assets under management.
- Concentration
- Too much of the book in one sector or one name.
- Leverage
- Total debt divided by EBITDA.
- Market regime
- The prevailing pricing and risk environment.