Why The Big Drop Today?, page-31

Regal are also a hedge fund manager, which is to say they routinely short sell the stocks they hold to hedge against downside risk. Their managed funds list the value of each stock holding along with percentage of hedging. In order for this to work in the case of the sort of large positions that regal takes, they need to predict market trends well in advance. In theory it is meant to reduce volatility across the share portfolio, which perhaps they deem necessary as their managed funds tend to hold relatively few stocks. However, I'm not so sure it works for them all that well. The volatility it generates, I think largely undoes what they are trying to achieve. Just my opinion.