rams, you got your strategies confused there boet. You hedge buy and hold portfolios, and you can only hedge it by going short. You can't, to my knowledge, hedge short positions - because going short means you are trading (it is a short term position). Therefore, having a long hedge on a short trade is counter productive or a zero sum gain. Investors hedge buy and hold portfolios, because they don't want to exit their holdings. This is particularly relevant for institutions, because to dump the stock is not as easy as for you and I, and to buy back again, in the quantities that htey need, even less so. Hence the hedge.
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