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Hedge Betting Explained
The hedge sports betting strategy allows users to insure their bets against losses by making additional bets, so it’s a particularly important skill to learn for new and seasoned bettors. In this guide, we have defined what a hedge bet is, explained how you can do it, and shared some useful examples to consider.
Hedge Bets Definition
Put simply, hedge betting is a strategy that allows bettors to mitigate potential losses and even secure profits by making further bets on the alternative outcomes to your first bets. This can be used when it appears as though your first bet could lose, so by placing a wager on the opposite line, you can nullify the financial risk.
When you hedge your bet, you are balancing your funds over the outcomes. However, you will need to ensure that the odds on the opposite outcome have not changed for the worse, which may require you to place additional bets at a competing sportsbook.
Another reason to hedge a bet is that the odds could become more attractive on the opposite market, so by placing these wagers, you may even earn a profit if it wins. It is possible to hedge a range of markets and bet types, from moneyline single bets to complex parlays with a multitude of legs.
While this process may sound somewhat straightforward, successful hedge betting often requires close consideration of the odds and risks involved. Some bettors may employ a hedge betting calculator to find opportunities as there may be no benefit to hedging a certain bet. We have covered these topics throughout this guide.
How to Hedge a Bet
If you have lost confidence in the backed outcome of a wagered market, it may be time to place a hedge bet. You will want to have closely analyzed the initial wager and event first to take into account whether alternative outcomes are realistic, which could be based on injury reports or shifts in team performances.
You could place a hedge on a moneyline, spread, or futures bet if need be. Before you place the hedge, you will need to calculate what the ideal amount is that could offset the losses and could even guarantee a profit. We have explained how to calculate a hedge later on in this guide.
Keep in mind that you don’t necessarily have to back an opposing team or market in a hedge bet. You may find another event in the pre-match or live betting lobby that offers favorable odds that if a certain amount is wagered, will offset risks and losses or produce a profit.
Pay close attention to the events that you’ve backed before the games and during them as this can provide helpful insights that could improve your future strategies. Once the bets have settled, assess your payouts to uncover any areas to improve in the future and to determine whether it was worth it.
Types of Hedge Bets
While the hedge bets meaning is quite clear, there are several betting options that the strategy can be applied to, to produce desirable results. Whether you wish to hedge before games have commenced, during events, or as a response to parlays, you’ll find many opportunities to reduce risks when betting online.
Pre-Game Hedge Betting
A pre-game hedge bet is perhaps the least stressful option in that you have plenty of time to assess the market viability and other odds opportunities. You may wish to place a hedge bet if you had previously backed a team to win the championship with a futures bet.
If this team makes it to the championship game, you could place a hedge on the opposing team at a certain stake that guarantees you will still profit, no matter the outcome. Another reason to hedge a wager pre-match is if you backed a winner weeks previously and their prospects now look shaky.
In-Play Hedge Betting
An in-play hedge bet provides a final opportunity to insure yourself against losses if your backed market is starting to look shaky. Fortunately, live betting is now a standard feature offered by all sportsbooks, so you can keep a close eye on an event’s progress and the hedging options.
Like any form of in-play betting, live hedge betting requires fast reflexes and adept decision-making skills. While you will have access to up-to-date player and game statistics, you must adapt quickly to capitalize on the shifting dynamics.
Parlay Hedge Betting
A parlay bet is a single bet that contains multiple market selections of “legs”. To payout, each leg must be successful. As parlays can theoretically contain up to 10 legs, it can be harder to hedge out of this bet. A parlay hedge is best employed when there is only one final leg to come through.
If you stake a certain amount on the opposing outcome of the final leg, you can mitigate your losses if the parlay fails. One of the best things about a parlay hedge is that a successful parlay can generate large payouts due to its favorable odds, so a win can effectively counteract the lost stake on the hedge bet.
How to Calculate a Hedge
While many external sites will provide a sports betting hedge bet calculator to determine what must be wagered to negate your losses, it can be helpful to familiarize yourself with the formula. You will first need to convert the American odds into decimal odds which can be done through your online sportsbook account settings.
To determine the hedge stake to secure a win, divide the hedge odds by the original stake. For example, if you have placed a $100 futures bet on the Buccaneers to win the Superbowl at +500 and they progress to play against the Chiefs who are listed at -200, you can do the following calculation:
- Initial Stake = $100
- Buccaneers Odds: +500 = 6
- Chiefs Odds: -200 = 1.5
- Formula: 100/ (1.5) = $67 Hedge Stake
If your hedge bet wins, you will receive roughly $100 including the return of your stake and profits, which negates your initial stake. If your initial stake wins, you will win $600 including your initial stake, with the $67 losses to the hedge being quite meager in comparison to the win.
Hedge Betting Strategies
There are several reliable sports betting strategies you can take when you hedge your bets. Firstly, never underestimate the importance of research and odds comparisons. You may find that a competitor sportsbook is offering more favorable odds than the operator you’ve placed your initial wager on.
If you wager at this site, you may be able to lower your hedge stake or guarantee a profit no matter the outcome. You want to be on the lookout for any hedge betting opportunities, so keep a close watch on the markets you have backed and respond according to injury reports, player or team changes, and momentum shifts.
You might want to diversify your wagers across multiple markets and events if this minimizes exposure or reduces any risks, whether it be through a future hedge bet, spreads, or totals. Hedge betting is at the least an option to reduce losses, so don’t bet in a way that could increase loss potential.
Like with any betting opportunity, it’s essential to manage your bankroll for longevity. Hedge betting can involve another sizable investment of funds, so if you wish to hedge on the occasion, be sure to factor this into your betting budget and consider the duration of payout times if futures or parlays are involved.
Hedge Tips to Consider
One common scenario of hedge betting is that bettors who have risked a lot on one market become uncomfortable at the prospect of losing and wager more to offset it. The problem with this is that bettors have probably wagered too much in the first place, which creates additional stress.
You can avoid this uncomfortable scenario by betting within your means. Hedging should never be panic-induced but rather a carefully considered strategy. As each wager will be impacted by the sportsbook’s vig, you will want to ensure that the wagers will maximize the expected value.
Difference Between Arbitrage and Hedge Betting
While both arbitrage and hedge betting are strategies that are employed to reduce risk and potentially maximize profits, they are different regarding what they require of bettors. Arbitrage betting is a process that involves finding odds discrepancies at different sportsbooks and exploiting them to guarantee a profit.
Hedge betting, on the other hand, is generally considered to be a defensive strategy to reduce losses. Arbitrage betting requires a lot of research and quick betting as sportsbooks actively try to stamp out these discrepancies. It can also require large financial investments to secure small profits.
For the most part, hedge betting is about offsetting risks within the same market rather than exploiting profit potential, though both strongly benefit from research and close analysis of market trends. Nevertheless, both are worthy strategies to learn no matter your experience level.
Pros & Cons
There are advantages and disadvantages to placing a hedge that should be closely considered before deciding on an action. The advantage of hedging is that when placed correctly, it can reduce your losses or even secure a profit. It is also a strategy that is relatively quick to learn.
However, as sports betting odds will have a vig included in the odds prices, this can mean a $100 bet will have a fee of around 9% included. By placing two bets on the same market, you are sacrificing a potential profit for the sportsbook. It is better to place wagers that you are confident in and use this as a last resort unless a profit can be guaranteed.
Resources for Hedge Betting
The internet is awash with helpful resources for sports bettors when it comes to placing bets and hedging them. As we’ve covered earlier, there is a simple formula that can be used to calculate your hedge values. However, you may wish to rely on the automatic tools described below to make this easier.
Online Hedge Betting Calculators
If you type “hedge my bets” or “bet hedge calculator” into your search engine, the results will contain several free tools that will do the hard work for you. You will just need to enter your initial stake, the odds of your first bet, and the odds of the hedge bet to discover how much must be wagered to successfully hedge.
If you need to provide decimal odds, there are alternative sites that will calculate these for you too. We recommend using these rather than calculating the stakes yourself as there is less risk of human error.
Forums and Blogs
Whether or not you’re interested in hedge betting, we recommend that bettors investigate different bettor forums to find a passionate group of like-minded people to discuss wagers. If you are looking for external advice regarding hedges, sites such as Reddit have several communities that relate to betting advice.
You may also discover expert sports pundits who offer their weekly picks or market predictions through podcasts or YouTube vlogs. By following this advice and learning the intricacies of betting, you’re more likely to make clever picks and reduce the need for hedge betting in the first place.
Explained Using Different Sports
Before we wrap up this guide, we want to present three different hedge scenarios for popular sports so that you can apply the knowledge to your wagers. We have covered football, baseball, and soccer, as these offer some of the most versatile betting markets at online sportsbooks.
Baseball
Consider this hedge betting scenario for a game against the New York Yankees and Boston Red Sox.
- Scenario: You’ve placed a $100 bet on the Yankees to win with -120 (1.8333) odds.
- Potential Profit: $83.33 ($183.33 - $100)
While the game is in progress, you become doubtful of the Yankees’ success.
- Boston Red Sox Live Odds: +140 (2.4)
- Scenario: Wager $76.38 on the Red Sox to win against the Yankees
- Potential Profit: $106.92
If the Yankees win, you will generate a profit of $6.92 after the hedge stake is deducted from the profit of $83.33. If the Red Sox win, your profit will be $6.92 after the $100 initial stake is deducted from the total winnings of $106.92.
Football
Consider this hedge betting scenario for a game against the Kansas City Chiefs and Baltimore Ravens.
- Scenario: You’ve placed a $100 bet on the Chiefs to win with -140 (1.71) odds.
- Potential Profit: $71 ($171 - $71)
While the game is in progress, you become doubtful of the Chiefs’ success and the odds are reversed.
- Ravens Odds: -140 (1.71)
- Scenario: Wager $100 on the Ravens to win.
- Potential Profit: $71
In this scenario, you will win $171 regardless of which team wins, including your stake. This will mean that you will take a loss of $29, which is considerably better than $100 without a hedge.
Soccer
Consider this hedge bet scenario for a totals hedge in a soccer game against Manchester City and Liverpool.
- Scenario: You’ve placed a $100 bet for Over 2.5 goals in the match at -110 odds (1.91)
- Potential Profit: $91 ($191 - $100)
If at half-time no goals have been scored, you could make a live Under wager.
- Under 1.5 odds: +150 (2.5)
- Scenario: Wager $76.40 on this outcome.
- Potential Profit: $191 - $76.40 = $114.60
If no goals are scored, you will secure a profit of $14.60 after the hedge stake has been deducted. If the hedge wins, you will also secure the same profit once the initial stake is deducted. However, this is a risky bet, as if more than two goals are scored, you’ll lose both stakes.
FAQ
How does a hedge work in sports betting?
A hedge bet is a strategy that aims to cover both sides of a sports betting market to reduce losses or guarantee a profit. This can be made for single moneyline bets, futures, spreads, totals, parlays, live bets, and more. It is usually employed when confidence in the initial wager falters.
What is the best strategy to hedge a bet?
You must commit to research and odds comparisons before you place your hedge wager. This will detail how much you can stand to recoup your losses or even profit. At times, it may be worth placing your hedge at an alternative bookmaker to secure better payouts. Hedging can involve considerable investments so smart strategies dictate that bankroll management is necessary.
Does hedging a bet guarantee a profit?
No, hedging does not always guarantee a profit. In most cases, hedging is used to reduce losses. However, there are instances when hedging can ensure a profit, and it’s worth researching to identify these scenarios. Some efforts to hedge can even result in further losses, so be wary of taking on more risk.
Which sports and sporting events provide good opportunities for hedging a bet?
Due to their dynamic and versatile markets, football, soccer, and baseball provide great opportunities to hedge. It’s worth familiarizing yourself with in-play betting, as you may be able to hedge during quarter-time or half-time periods for these sports. We have explored three hedging scenarios for these sports in the previous section.
Is there a way to calculate future payouts when hedging a bet?
While you can do your calculations, we recommend that you employ an online betting hedge calculator to produce consistent and accurate results. You may need to convert the American odds into decimal odds before you do this, but there are also online tools that can help with this.
Conclusion
Hedging a bet is at times an effective strategy that is worth understanding as a new or seasoned bettor. Whether or not it’s the right approach for you, knowing the strategy as a final resort can help to significantly reduce losses on a market that you regret or have lost faith in.
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Hedge betting can be a lucrative endeavor, making it essential for serious bettors aiming to get an edge on the sportsbooks. Before placing more bets, be sure to understand the strategies involved to give yourself the best chance to raise a profit.