ꦛ Hedging is a sports betting strategy that allows punters to reduce risk or guarantee a profit by covering multiple outcomes of an event. In this article, we’ll explain how to hedge a bet and master this savvy approach to sports betting.
- 1 What Is Hedging a Bet: Quickly Explained
- 2 Hedging a Bet Example
- 3 How To Hedge a Sports Bet
- 4 When Is the Best Time To Hedge a Bet?
- 5 How To Hedge a Parlay Bet
- 6 How To Hedge a Moneyline Bet
- 7 Hedging Bet Tips & Strategies
- 8 Pros & Cons of Hedging a Bet
- 9 💟What Is the Difference Between Hedge Betting & Arbitrage Betting?
- 10 ThePuntersPage Final Say
- 11 FAQs
What Is Hedging a Bet: Quickly Explained
𝔍 Hedging a bet is a technique for mitigating risk or locking in a profit on a stake. It entails making a second bet that partially cancels out your initial wager. Consider it as a type of insurance.
You place the first bet but subsequently place an opposing wager, which can be done at a later date for futures or during the game for moneyline💧, total, and spread hedges. By doing so, even if your first wager loses, you won't come out with a complete loss. Yet, hedging usually means that you won't make as much profit if the original wager ends up a winner.
Hedging is a key concept to understand and should be a small part of a well-rounded betting strategy. Before signing up for a legal U.S. bookmakerꦏ, you should know the basics of wagering, including how to hedge properly. It can help you preserve your bankroll and make the correct decisions to ensure profits in different scenarios.
꧙ This technique is very commonly associated with futures thanks to long odds being available before seasons or tournaments begin. The opportunity to hedge the opponent in the final is a simple process which we’ll dive into later on. Hedging calculators are also an excellent tool to use when figuring out amounts to hedge.
Hedging a Bet Example
⛎ Let’s say you own a $100 futures ticket on the San Francisco 49ers (+600) to win the Super Bowl. You placed it prior to the season, and if it wins, you’ll take home $600 along with your $100 stake.
🦹 San Francisco reaches the Super Bowl and is set to face the Kansas City Chiefs (+100). If you want to guarantee a profit, you could hedge your bet by placing a wager on the Chiefs.
🐟 For instance, if you wagered (hedged) $200 on Kansas City (+100) and it was victorious, you’d walk away with $400 ($200 stake plus the $200 payout) minus your $100 bet on the 49ers, for a total profit of $100.
🌳 In the case that San Francisco wins (which is obviously the outcome you’d prefer), and you made the $200 hedge bet on Kansas City, you’d walk away with a $400 profit.
♛ If you didn’t hedge and let your 49ers ticket ride with San Francisco triumphant, you’d profit $600 and get your original stake of $100 back, receiving $700 in total.
✱ If you don’t hedge and Kansas City wins, you’ll lose your $100 initial wager on the 49ers and be down $100 in your bankroll after the result.
🌳 This is just an example. We’re not advising you to place a specific amount on either team or detailing how much to hedge. That depends on a number of factors, including how much profit you want to ensure, your bankroll, and your confidence level in the 49ers or Chiefs.
How To Hedge a Sports Bet
While this scenario works for any bookmaker, let's take a step-by-step look at how to hedge a bet on FanDuel🥂. We’re using a generic example of the Copa America and aren’t making any recommendations in terms of quantities.
1. Visit a Sportsbook & Create an Account
𒅌 Once you're at a bookie of your choice (preferably with the best possible odds), enter your personal information and verify your location.
2. Make a Deposit
🉐 Choose your preferred deposit method, select a bonus, and make the deposit.
3. Place a Futures Bet
Make a futures wager🔯 after performing in-depth research, so you are well-informed. We’ll use a scenario where you bet on Colombia at +1300 before the Copa America.
4. Hedge Your Bet
♏ If the team you bet on reaches the final, you’ll likely want to hedge your bet. Since Colombia has reached the final, you would hedge your bet by betting on its opponent, Argentina, to either guarantee a profit or break even if Colombia were to lose. This way, you aren’t in the negative column. However, if Colombia wins, you’ll obviously return a larger profit.
When Is the Best Time To Hedge a Bet?
🀅 The following scenarios include some of the best times to hedge:
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Hedging to rake in profits🌟: Hedging is usually performed to make sure you secure a profit. You can choose the amount against your original bet to profit a certain percentage.
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An unlikely event occurs in the matchܫ: If you’ve bet on a team to win a match and an injury to a star player or red card occurs, you can hedge to make sure you profit, even out, or limit your losses.
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In-play hedging:ಌ This is when you hedge a game live. The same scenarios as above correlate with in-play hedging.
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Limiting losses🎀: If it's early in a match and you think your wager is headed for a loss, instead of surrendering and taking a loss on the primary slip, you can hedge to secure a portion of your bet back. This helps preserve your bankroll.
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Understanding how to hedge a futures bet♓: Futures are a common bet type for hedging. Staking a team with longer odds before a season or tournament ensures a higher payout if they win. Once they reach the final, for example, placing a bet on the opponent allows you to ensure you won’t come up empty-handed.
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Hedging parlays⛦: In cases where you’ve hit every leg except the last, hedging makes sense. If you placed a four-team parlay at +2000 odds and the first three legs were successful, wagering on the opponent for the last game allows you to profit should it fail to succeed.
How To Hedge a Parlay Bet
𒉰 Now that we've discussed hedging parlays, take a look at the example below.
You placed the following parlay with four legs:
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Atlanta United Moneyline: +110
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Philadelphia Union Moneyline: -135
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Seattle Storm Spread -9.5: -108
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New York Liberty Moneyline: -280
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4-leg parlay odds: +855
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$50 wager to win $427.74
🍒 The first three legs with Atlanta, Philadelphia, and Seattle were all successful, but you need New York to win or the entire wager will be graded as a loss. To hedge, you would bet on the New York Liberty’s opponent — which, in this case, is the Connecticut Sun at +220.
☂ The amount is up to you; however, in the scenario that you were confident in the Liberty but wanted to at least come out with a slight profit if they lose, you could wager $50 to win $110.
🌜 It would pay you $160 total with $60 in profit since you’d deduct the $50 stake from the lost parlay. If the parlay was successful and you hedged, you’d profit $377.74 by subtracting the $50 hedge.
How To Hedge a Moneyline Bet
🥀 Hedging a moneyline bet usually requires you to wager on a game live.
ꦰ Let’s say you bet on the Dallas Cowboys at -110 odds ($110 wins $100) against the New York Giants.
🦩 The Cowboys’ starting quarterback, Dak Prescott, gets hurt in the first quarter while the team is up 7-0 and is ruled out for the game. You believe the Cowboys will lose because the backup quarterback's skill level has dropped drastically compared to Prescott’s. The Giants are +125 live, so you hedge by betting $100 to win $125 ($225 in total, including stake and payout) on them to win.
ജ In this scenario, if the Cowboys went on to win, you’d win $100 and even out, which essentially cancels out both bets. If the Giants won, you’d win $125 and profit a total of $25 since you subtract your $100 first stake on Dallas.
🌄 The hedge serves as a safety net if you had let your initial bet ride and the Cowboys lost (you would have lost $100).
It’s important to remember that you can use a hedge calculator🐲 in scenarios like this as well. These are just examples and we aren’t recommending a certain amount of money to be wagered.
Hedging Bet Tips & Strategies
🦄 The tips and strategies below should be used in a well-developed betting and hedging strategy.
Choose the Right Markets𓆏: Bet types are imperative when hedging. Futures present the simplest scenario to hedge, with teams having much higher odds, although it is difficult for the team to reach the championship or final. Moneylines and totals can be trickier to hedge depending on the situation, and are usually hedged live. Large line movements do occur sometimes, allowing you to hedge before the event begins.
Compare Odds♓: Always make sure to odds shop across different websites when betting and hedging. One sportsbook can offer better odds for your futures bet, and if the opportunity presents itself to hedge later in the tournament, moneyline odds will be different across bookmakers.
Use Tools and Implied Probability:♔ Using tools such as a hedging calculator can make things a lot easier when hedging. Also, make sure to calculate the implied probability of a team winning when considering how much you’re going to hedge in certain instances.
Be Practical about Limiting Your Losses🌄: Being practical is essential because you aren’t always going to be able to lock in a profit or even out. If you think the team you initially wagered on is doomed, and betting on the opponent offers a small loss, take it rather than losing your full stake of the initial wager.
Hedge Parlays: 🥂As eye-popping as the parlay payout appears, if you’re one leg away from hitting a massive payout, don’t let your pride get in the way. Hedge that last leg. It’s up to you to determine the amount. A hedging calculator can be clutch in such situations.
Pros & Cons of Hedging a Bet
👍 Just about every betting strategy has positives and negatives surrounding it. Let’s take a look at both in terms of hedging.
- Lowers risk: Placing a second bet that benefits you when your first bet loses ensures you receive a small profit or reduces potential losses.
- Maintaining a bankroll: Hedging can produce funds, enabling you to keep your bankroll steady. By locking up a profit, you can utilize that money by withdrawing it or for other wagers.
- Can preserve parlays: Winning parlays is extremely difficult. The more legs, the lower the chance of winning. Hedging allows you to save your parlay by guaranteeing a profit in certain scenarios.
- Hedges can prevent larger losses: For those rare occasions when you do decide to bet a larger amount of your bankroll (4-5%), should things head south during a game such as an injury, hedging allows you to limit these losses. This can also be the case with multiple bets over a period of time when hedging is done properly. Remember, no bet is ever considered a “lock.”
- Hedging can cost money: You’re going to pay the vig twice since you’re placing a second bet. You might also take a small loss.
- Poor hedging can lead to losses: If you don’t calculate the hedge properly, you can lose more money than you should. That’s why you need to calculate odds correctly and use tools such as hedging calculators. Hedging isn’t always appropriate for every situation, and some bettors hedge at the wrong times or too frequently.
- Potential profit is lessened: Obviously hedging can be a great way to secure profit. However, it takes away some of the potential profit when your initial pick hits.
What Is the Difference Between Hedge Betting & Arbitrage Betting?
🔯 Hedging and arbitrage wagering both entail several wagers but aim for separate outcomes. Hedging tries to reduce risk on an existing bet by placing a counter bet. Arbitrage betting takes advantage of price disparities between bookmakers to ensure a small amount of profit, regardless of the match's outcome.
We’ll use the MLB All-Star game as an example. The scenario will include odds from FanDuel (pictured below) for the American League and hypothetical DraftKings odds for the National League.
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♛FanDuel lists the American League team with odds of -118.
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𒊎DraftKings lists the National League squad at a line of +130.
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☂A smart punter becomes aware of these odds and believes they can use them to collect a profit regardless of which team wins. They choose to wager a total of $100 split between both teams.
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꧋They wager $55.46 on the American League at FanDuel.
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꧅They stake $44.54 on the National League at DraftKings.
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💛If the American League wins, the bettor receives back $102.46 from FanDuel (Calculation: $55.46 + ($55.46 / 1.18) = $102.46).
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🔥If the National Team wins: The bettor gets back $102.44 from DraftKings (Calculation: $44.54 * 2.30 = $102.44).
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ꦑIn this example, the punter makes a profit of $2.46 if the American League wins or $2.44 if the National League comes out victorious. Both options secure a profit.
🦂 This is a basic example of arbitrage betting exploiting differences in lines to collect a small profit. Remember, these opportunities are hard to find and bookies are known for limiting accounts if they suspect you’re employing the strategy.
ThePuntersPage Final Say
꧑ Hedging is a sports betting strategy that must be used in certain scenarios and as part of a well-thought-out, multifaceted betting strategy. As a punter, you shouldn’t be placing bets or signing up for legal bookies without having knowledge of how to properly hedge a bet. Remember to use tools such as a hedging calculator and to wager responsibly.
FAQs
To hedge a spread bet, you place a wager on the opposing team to cover the opposite of your initial wager.
🃏For example, you bet on the Spurs to lose by eight or fewer points and you think they aren’t going to cover. If the opportunity presents itself to wager on their opponent, the Suns, to win by eight or more points, you’re guaranteeing yourself the chance not to come up empty should your initial bet fail.
ꦏHedging a free bet involves the same examples we’ve discussed throughout this article. In most cases, free bets are bonuses provided by the sportsbook after signing up. For instance, if you received a 100% deposit match bonus after depositing $100, you’ll get $100 in free bets.
🍌If you're stuck on how to hedge a bet, calculators are extremely helpful and offer recommended amounts depending on stake sizes.
💫It’s up to the individual bettor and their performance to determine if hedging helped them profit. Hedging can be profitable in the long run when done properly.
ಌYes, you can hedge a losing bet live to either guarantee a profit, even out, or minimise losses. However, if a bet is already graded as a loss by the bookmaker after the event ends, it is clearly too late to hedge it.
The formula for hedging a moneyline bet is:
Hedge Stake = (Original Stake * (Winning Odds of Opposing Team – 1)) / (Opposing Team's Odds – 1).