what are hedger funds ? and how risky are they?

Hedge funds are pools of investments, similar to mutual funds except that they are loosely regualted and employ a much wider variety of strategies, such as Merger Arbitrage, Long-Short Investing, Funds of Funds, prime funds, etc etc.

hedge funds rarely use hedging as an investment tool. they often use leverage to increase their returns. Some are focused on certani sectors like healthcare. others (long short) often use teh 130-30 rule for using leverage to go long on an investment, and simultaneously go short on another.

Hedge funds are considered alternative investments, and have been seeing huge cash inflows from wealthy and institutional clients that previously did not allocate funds to such perceived risky ventures. there have been some big hedge fund meltdowns, such as Amaranth Advisors natural gas trading related meltdown, or the famous LTCM bailout in the late 90s. Big players include Citadel, Moor, DE Shaw, SAC Capital, Blackstone.