The bid is always going to be less than or equal to the ask. If you are long and want to be conservative, you want the lowest price (bid) while if you are short you want to use the highest (ask) price.
The most conservative approach to valuing underlying hedge fund positions is to use the bid prices for longs and ask prices for shorts . This approach takes into account both the demand and supply sides of the market, providing a more balanced and conservative estimate of the position’s value.
The other options are not as conservative, as they rely on a single price point (the average of the bid and ask prices) or the most recent market prices, which may not accurately reflect the true value of the position.