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Diffusion requires:
Short Selling
The practice of selling securities or other financial instruments that are not currently owned, and subsequently repurchasing them at a lower price.
Market Neutral
An investment strategy that seeks to avoid some forms of market risk by taking offsetting positions in different securities, aiming for a net market exposure of zero.
Government Regulation
The act of controlling business behavior through a set of rules or laws set forth by the government to achieve outcomes that might not be achieved through free markets.
Incentive Fee
An incentive fee is a fee charged by a fund manager based on the fund's performance, encouraging the manager to achieve superior returns.
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