The market price on the last day doesn't matter. The median price is used for the conversion, and we're calculating (hedging) here in terms of HIVE. You will almost certainly end up with more HIVE than you started with, meaning you are better of than if you had simply held the HIVE rather than engaged in the conversion.
If you want to hedge in USD terms, that can be done as well, but the strategy would be different.
You're right, I was thinking in USD terms, not hive.
What would be the strategy to hedge in USD?
Convert the HBD to a stablecoin then short hive?
Same strategy as before plus short HIVE.
Actually if you wanted to hedge your HIVE holdings (without selling them) the strategy is always just to short HIVE 'against the box'. The conversion part doesn't matter except that it grows your HIVE holdings, so you can consider it to be the same.
Yeah, that makes a lot of sense. Hopefully we'll have an effective way to trade hive on derivatives soon with what @klye is doing.
Exchanges have very low limits on hive borrowing.