There must be some that did very well on the shortside of that move.
In the context of the hedge unwind strategy & GSL's, your exposure is limited to the delta between your long and short.
i.e. if your short is equal to your long you're 100% hedged so a 25% move would result in zero losses & zero gains
if you're long & 95% hedged your exposure is 5% of your long position
if you're short & 95% hedged your exposure is 5% of your short position
With this, ignoring GSL costs, if you're unwinding 10% of your initial position per rotation (leaving you with 5% exposure at any point in time), your risk is reduced by 95% under the hedge strategy over an un-hedged strategy or under non-GSL strategy in an event where regular stops are not or cannot be triggered.
If you wanted to be 100% risk off in a 10% per rotation hedge unwind strategy you could open 2 covers
1. a long sized to match your exposure at each rotation with an extreme limit GSL &
2. a short sized to match your exposure at each rotation with an extreme limit GSL
(each cover position size in the example would be 5% of total + GSL exposure)
That way under a 25% shock move to the downside, the long cover would be stopped out and the short cover would create a profit that netts your core positions losses (assuming you core is nett long at the time. If it's nett short you would do well).
