This is wrong right? Over/under-hedging with a forward contract

CFA Level III Fixed Income
#1

Wiley’s text states:

Instead of matching the underlying spot or forward position with identical value of hedged instrument, the portfolio manager can adjust the hedge ratio to be above or below 100%. Over- or under-hedging depends on the portfolio manager’s opinion on future spot rates. If the base currency (the USD in the rate given as JPY/USD) is expected to depreciate and the manager is hedging the base currency, then over-hedging is appropriate. If you hold a short position in USD, depreciation helps you.

If you hold a long position in USD, depreciation in USD hurts you. You over-hedge. Selling more USD in the forward market at a fixed price would help you and generate a speculative gain in the forward market, partially offsetting your loss in the spot USD.

If you hold a short position in USD, depreciation in USD helps you. You over-hedge. Buying more USD in the forward market at a fixed price would hurt you and generate a speculative loss in the forward market, partially offsetting your gain in the spot USD.

But if you held the short position, you would UNDER hedge, right? You would buy less dollars in the forward market at the higher price to not offset your gain in the spot USD as much. Tell me I’m not taking crazy pills.

#2

Adjusting the hedge ratio changes the number of contracts tried to hedge. Say you’re short USD to hedge your existing long position in it and the formula gives you 51.55 contracts to hedge. Since you can’t sell decimals of contracts, you choose to sell 52 contracts- Then you’re overhedging. If you sell 51 contracts you’re underhedging. That’s it! Your existing spot position continues to exist. In your last para, your short position is anyway held and your hedge is taking a long USD futures.