If I'm running a mutual fund and want to hedge against my stock...

If I'm running a mutual fund and want to hedge against my stock going down, the easiest thing to do is to sell the long position. I could arrange to borrow the stock, lodge collateral and then sell the borrowed stock, but either way I have to sell the stock on the market. It's a rather expensive way to achieve the same thing.

On the other hand, if I think GXY is a great mining company among all the lithium stocks, and I want to remove the common risk of lithium sentiment in general, then I might hedge by holding GXY long and then short the LIT US etf. This would be a common way for a hedge fund to isolate the bet that AT and his team are best-in-class.