Hedge betting is a sports betting strategy that most bettors are at least vaguely aware of. This doesn’t mean that they all fully understand how to use it effectively or that they know why and when they should consider hedging a bet. As a result, the strategy is often used incorrectly or for the wrong reasons. Hedge Betting Explained Hedge betting or “hedging” is a betting strategy applied by betting professionals as a means of reducing risk and securing assured winnings. Here’s how to use hedge betting in sports betting. To hedge or not to hedge, that is the question. Hedge funds are private investment funds with a reputation for using high-risk tactics such as leveraging and short-selling the market to make money. To calculate a back to lay hedge bet is fairly simple. As an example let’s say you have bet £20 on Leeds United to beat Burton Albion at odds of 1.55. During the game, Leeds take an early lead. You know they have a poor record of keeping leads this season so decide you want to hedge your bet with the lay odds now at 1.33. Calculating how.

Hedging bets is something that is talked about more than it is understood. It’s also a concept that can be very dangerous because it can easily be used incorrectly in ways that negatively impact your bottom line.

Basically, hedging is just a way to reduce or eliminate the risk of a bet. You would generally look to hedge a bet when you are no longer comfortable with the bet you have made – i.e. you don’t think you have a particularly good chance of winning. The simplest example of a hedge is a bet on the other side in the game in question. Let’s say, for example, that the Yankees were playing the Red Sox, and you had bet the Yankees at -120. As the game neared, though, you became less certain that the Yankees were going to win. You could hedge that bet by betting on the Red Sox at +100, and you could do it in a number of ways. If you bet the same amount of money on the Red Sox as you bet on the Yankees then your only risk would be the juice you would have to pay if the Yankees won. If you bet less on the Red Sox than you did on the Yankees then you would be making a partial hedge bet – you would effectively be reducing the size of your bet on the Yankees. If you bet more on the Red Sox than you have on the Yankees then it’s as if you had just bet on the Red Sox.

That’s hedging in the most basic form, but there are ways that it can be more powerful, and therefore more interesting. One good example is with series bets in the playoffs. Let’s say, for example, that you had bet $100 on an underdog in the series at +200. You can bet series bets at the start of the series, but you can also bet them throughout the series – with adjusted prices according to the results so far. If your underdog wins the first game of the series then the prices and betting lines will adjust significantly – the favorite could fall all the way from -240 to -120. At that point you could bet $120 on the favorite to win the series. If the favorite does fight back and win the series then you would win $100 from your hedge bet, and still lose the $100 you bet on the underdogs, so you would break even. That’s a lot better than losing $100. If the underdogs continue on and win the series then you would win $200 on your original bet, but lose the $120 on your hedge bet, so you would have a profit of $80. You would have an upside of $80 with a downside of breaking even – you have definitely cut down on your risk. If you want to accept less upside you could even guarantee yourself a profit. If you made a $150 hedge bet on the favorite then you would make a profit of $25 if the favorite won, and $50 if the underdog won.

If you understand the concept then you also can see that you could do the same thing by betting on a game and hedging the bet with in-game betting. The opportunity to make a guaranteed profit happens surprisingly often, and even if that doesn’t work out quite right you can often limit the size of your loss.

So, with hedging we can limit our losses and often guarantee a profit. Sounds perfect, doesn’t it? Well, since it seems to good to be true there are obviously some real downsides to hedging. The first is that you often have to act fairly quickly to be sure to get the right price. Hedging can be a bit confusing to think about when you are first doing it, so it is easy to make a mistake when you are working fast. I’ve heard several stories about guys who thought they were hedging their bet but were actually increasing their exposure – and their potential losses. That can be a painful lesson.

More significantly, the problem with hedging is that you no longer have a chance to win your bet after you hedge it. Unless you made the bet specifically with the hope of hedging it (which would be a highly risky gamble) then you probably made it because you thought you had a good chance to win it – there was value. If the bet can be hedged that typically means that your team is doing well. 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, the more successful you will be over the long term. If you are making sound bets and then hedging them then you might make a profit in the short term, but over the long term you are decreasing the amount of value you are capturing, and limiting your long term expectations as a result.

That’s not to suggest that hedging is always a bad idea. You just have to be very aware of what you are doing, and have a good reason for doing so. If you have a good reason to think that you don’t have the edge you thought you did – a matchup you were counting on dominating isn’t turning out that way, or a star player is playing like he is hurt – then a hedge can actually be a way to gain more value.

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The term 'Hedging Your Bets' or Hedge Betting basically involves placing multiple bets within the same market on various potential outcomes, taking advantage of variations across the market. This technique acts as an insurance mechanism when done correctly, and can minimise and potentially eliminate the chance of losing, with the bettor able to guarantee a return before an event has finished.

You have probably heard the term 'hedge your bets' used in everyday life. It is a phrase that denotes caution. To hedge your bets is to protect yourself from making a bad choice or decision. You may hedge your bets when you are at work by requesting more budget or time so you know you will have what you need to complete a certain project. So, what does hedging your bets mean in the world of betting?

What is hedge betting?

As with its idiomatic use, hedging your bets in betting (sometimes referred to as hedge betting) means to cover more than one eventuality so that you do not lose too much money if your original bet doesn't come off. Let's look at an example to gain a clearer understanding.

Imagine that Liverpool are playing Paris Saint Germain in the Champions League quarter finals. In our example, a bettor has placed their bet on Liverpool winning, but as the kick-off looms they are not sure it will come off. Both teams are in good form, leading their leagues by significant margins and have star players who can completely change games in an instant; the match is very difficult to accurately predict. Our bettor is having doubts, so they change their mind and place a second bet; one on Paris Saint Germain to win.

They have now hedged their bets. This is because even if the original bet does not come off and Liverpool lose, the bettor will still earn some money because of the second bet on PSG. In other words, they have mitigated some of the risk of the Liverpool win bet failing.

What are the Pros and Cons of hedge betting?

Let's deal with the cons first of all. The obvious one is that two contradictory outcomes cannot possibly take place in a match; both Liverpool and Paris Saint Germain cannot win. This means that hedging your bets guarantees that you will lose one of the bets and therefore lose some amount of money. So, hedging your bets somewhat goes against the very essence of betting, which is to make money.

However, this is where the pros of hedge betting come in. If the original bet on Liverpool loses without the second bet to back it up, the bettor loses all that stake. With the second bet placed on PSG, those losses will be diminished, so if the worst happens, the bettor will not experience quite such a bad hit to their pocket.

Hedging your bets can also take place in play. Perhaps the bettor is quite happy to stick with their original bet before kick-off, but by half-time their feelings have changed. PSG are on-form and much the more likely to win, and Liverpool's star man has been taken off injured leaving them toothless up front. A Liverpool win is now looking less likely than it was before the match, so a second bet is placed early in the second half to settle the bettor's nerves and cover the possibility of a PSG win. Again, our bettor has hedged their bets.

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Hedge betting vs cashing out

Betting Payouts Explained

In this example, hedging your bets is somewhat similar to the cash-out option, with a couple of notable differences. First, whereas the cash-out option is instigated by the bookmaker, who decides what to offer and when, a hedged bet is instigated by the bettor, who decides what extra bet they want to place and when. Of course, if the bookmaker you use does not offer in-play betting, hedging your bet during the match would be impossible and you would have to place additional bets before kick-off.

Secondly, whereas hedging your bets is a defensive measure, cashing out is a little more proactive and can make you more money. Hedging means you are simply mitigating a potential risk and reducing the possibility of suffering a damaging loss; you are saving a little bit of money. Cashing out does not do that; instead, it can allow you to get a healthy sum of money, even if it is likely to be less than what you would make if you were to see your original bet through to its conclusion.

So, which is the better option for a bettor who wants to cover the possibility of losses: hedge betting or cashing out? There is no hard and fast rule that you can use every time you place a bet. Every instance must be taken on a case by case basis, as the circumstances can change dramatically. What is for certain across each and every case is that it is important for you to manage your emotions, and study the game and the teams carefully.

Just because Paris Saint Germain are in the ascendency does not mean it will stay like that and they will go on to win. Just because Liverpool are struggling does not mean that they can't hit their opponents with a sucker punch. Do not over-react to the events of the match and make a bad decision (whether it is cashing out or hedging your bets) just because things are not going quite as you foresaw at that particular moment in time. Take your time, think things through carefully and come to a decision that you feel is right for you.

In summary

Ultimately, hedging your bets is all about risk and reward, and like the cash-out option, it can sting you as well as help you out. To get the most out of it, you should take care making your decisions and not rush in to anything that you may look back on later with regret. Sure that second bet could save you a large loss, but it could also cause you to miss out on the entirety of a nice win unnecessarily. Done well, hedge betting can be hugely impactful; done poorly it can be very costly indeed.

Hedge Betting Explained Definition

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