How To Hedge Your Sports Bets
In life, when someone hedges a situation they are limiting their exposure to the downside. In day to day life, someone can hedge many things.
That means that your bet has a better chance of winning then it did when you made your bet – you have even more value than you originally did. By hedging the bet you are throwing away all of that value – or at least most of it. Successful sports betting is all about maximizing the value of each bet. The more value you capture in your bets.
- While hedging bet can seem like a challenging strategy to master, the concept is simple. Hedging involves placing a new bet on a different outcome than the one you originally wagered on.
- Full Article at Oddsmarket: Basics Part 1: How To Bet Straight Bet: https://www.youtube.com/watch?v.
When someone hedges in sports betting they are limiting their exposure to a potential financial loss. Hedging a bet is an advanced strategy used by sports bettors to either reduce the risk of a wager or to guarantee a profit of some kind from a wager.
Similar to middling a wager, hedging is a strategy that involves placing wagers on the opposite side of your original bet. As futures bettting has become more popular, so has hedging. New sports bettors might have heard about the sports betting risk management strategy in mainstream media.
If nothing else, hedging a bet has become a popular discussion point for any occasion when a sports bettor has a futures wager pending that could result in a large win. Hedging a bet is a way to guarantee at least some kind of win.
While there’s mainstream media coverage about hedging a wager, there isn’t much mainstream information on how to hedge a bet.
What is hedging a bet?
Hedging a bet is a strategy in which a bettor will place a second wager against the original bet when they’re unsure that the outcome of a wager will be a win.
Even if a bettor thinks they might win, they could decide to hedge a bet just to be safe and guarantee they walk away as a winner. The win won’t be as large but the additional wager is a way to create some kind of insurance if the original wager loses.
Hedging is a useful strategy even though betting on all sports isn’t the same. Futures wagers are long term bets that use a moneyline. Some individual games use a point spread while betting on other sports may involve a moneyline.
A bettor can hedge against any of these types of wagers. This strategy allows the bettor to walk away as a winner or less of a loser if they choose.
How to hedge a bet
Hedging a bet isn’t difficult. However, the concept isn’t at the forefront of everyone’s mind when placing a wager. Hedging a bet is protecting some kind profit that was — and still may be — possible from an original wager.
Hedging a bet is done by placing a second wager against the original wager that will guarantee that the bettor sees some kind of profit at the end of the event. A bettor can hedge a future bet or hedge individual games. Here’s an example of hedging a futures bet:
Original wager: $100 futures bet on the New York Jets to win the Super Bowl at 60-1.
- Potential win: $6,000 + original $100 wager.
- Hedge: $1,000 wager on Los Angeles Rams to win the Super Bowl at 2-1 when they face the Jets in the Big Game.
- Best result: Jets win the Super Bowl and bettor wins $6,000. The $1,000 hedge on the Rams for safety is a loss. The total win is $5,000 instead of $6,000.
- Hedge win result: Rams win and the bettor wins $2,000. After everything, the $1,000 hedge minus $100 original wager gives a final win of $900.
- Worst result: No hedge and Rams win. $100 wager and the potential $6,000 win is completely lost.
This example shows that a hedge on a futures bet is still a profitable wager. The hedge protects the bettor from losing the entire potential profit from the wager.
Hedging a bet means the original bet isn’t as profitable as it could be. However, winning something is better than losing everything. That’s the purpose of hedging a wager.
This example also shows that everything risked (the original $100 wager and $6,000 potential win) is lost without hedging.
Some bettors don’t mind losing the $100 wager and potential profit. There are other bettors that prefer to walk away with some kind of profit after waiting an entire season.
Other times to hedge a bet
Hedging a futures bet used to be the only time this strategy was discussed. Sports betting trends in the US are changing and so is how bettors use this strategy.
In Play wagering makes it easier to hedge against an existing pre-game wager that looks shaky. In the past, bettors had to wait until the middle of a game to place a halftime wager.
Parlay betting continues to become more popular every year. Bettors are now using the hedging strategy to ensure a win. A bettor will place a hedge on the final game of a multi-leg parlay to ensure some kind of positive result from a wager.
Depending on the amount of the original wager, a bettor might choose to hedge a little so they can mitigate a loss. Losing is never fun but losing less is better than losing everything risked.
Hedging a bet is a useful tool for any sports bettor. Gambling on sports does not have to be about winning or losing a wager. There are multiple strategies to use where a bettor can guarantee some kind of profit on certain wagers.
ALSO READ: Sports Betting Lesson: When It’s Smart To Hedge Your Bet
Find the best hedging opportunities at online sportsbooks
What is Hedging?
Hedging bets are essentially bets on the opposite side of your original bet to reduce the risk of your initial bet. Arbitrage betting is essentially an extreme form of this, where the odds are so different that your hedge guarantees profit regardless of the outcome.
How Can I Calculate a Hedge Bet?
The formula for calculating a hedge bet that splits the possible profit between both scenarios is actually quite simple:
HB = (P1 + B1) / O1
where:
HB = Hedge bet amount
P1 = Profit from original bet
B1 = Original bet amount
O1 = Hedge bet decimal odds
You can then determine the profit you would make regardless of outcome using the following formula:
P = (HB – P1)
where:
P = Profit regardless of outcome
HB = Hedge bet that was just calculated
P1 = Profit from original bet from previous equation
Tip: Based on the hedge bet equation, you should odds shop while hedging. Go to an odds aggregator like Oddschecker and pick the highest decimal odds possible on the team for your hedge bet. The higher the odds, the more profit you will be able to extract from hedging bets.
Why and When Would I Hedge a Bet?
There are certain circumstances where hedging bets would be very beneficial.
This can either be to lock in profits or to minimize losses on an existing bet.
Futures Bets
Let’s say that you placed a $100 bet for the Pittsburgh Steelers to win the super bowl at the beginning of the season at +10000 odds.
They just won the AFC championship and are headed to the super bowl to play the Seattle Seahawks. Clearly, the payoff for you, if the Steelers win the super bowl, is quite large. Although, if they lose, you don’t want to lose all of your winnings. You can hedge this bet by betting on the Seahawks to win the super bowl at their current pregame odds of +200 (3.0 decimal odds). Now in either scenario, you will make money.
Hedge Bet on Seahawks = ( $10,000 + $100) / (3.0) = $3,367
Profit Regardless of Outcome = ($10,000 – $3,367) = $6,633
Hedging Parlays
In the scenario where you are on the last leg of your parlay bet, it is a smart idea to place a hedging bet on the last leg of your parlay.
Since you don’t want to lose all of your parlay gains if the last leg fails, it is wise to hedge against the outcome you bet on in the last leg of your parlay.
Hedging to Minimize Losses
Let’s say you bet on a team to win a match. Then their star player gets hurt before the match and is not able to play anymore. This greatly diminishes the team’s ability to win.
Define Hedge A Bet
You can minimize the losses you would expect by placing a hedge bet against your original team. In this case, you will likely be guaranteed to lose money, but the losses are much lower than you would have incurred had you not placed the hedge bet and the opposite team wins.
Cancel a Bet Made on Accident
Accidently placed a bet?
Sportsbooks don’t really offer the ability to cancel bets, or everyone would cancel bets if the match started to go in the opposite direction.
By placing a hedge bet against the bet you placed on accident, you will likely just incur a small loss instead of losing more money if the accidental bet lost.
Hedging In-Play
You place a bet on the Steelers to win vs. the Seahawks pregame, and they are crushing it, but they are playing a team that could come back.
By placing a live hedge bet on the Seahawks during the game, you can protect yourself from incurring losses if they come back and win.
Conclusion
Hedge Bets Meaning
Hedging may not always be worth it. Sometimes you place a small bet just for fun. Is it really worth taking the time to hedge this small bet? Probably not. Although, by using hedging in some of the scenarios above, you can lock in profits. Over time this can make the difference between successful and unsuccessful sports bettors.
If you’re interested in a way to make easy, low-risk profits in a strategy similar to hedging, we recommend you check out our Guide to Arbitrage Betting. Arbitrage betting is one of the only ways bettors can actually make money sports betting in the long run.
Already know what arbitrage betting is? Live in the U.S? Feel free to check out our service! Surefire Betting is the only U.S.-focused sports betting arbitrage database.