What Is Hedging in Sports Betting? When To Hedge Your Bets
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.
The purpose of this article is to provide some clarity on exactly what the hedge betting strategy is all about. We’ll explain the fundamental concept and look at why it’s a strategy worth considering. We’ll also provide some examples of when it can be used, and why, and look at its advantages and disadvantages. We’ll provide some helpful tips for using the strategy too.
The Basics of Hedge Betting
The best way to view hedge betting is to think of it as a form of insurance. It’s actually a relatively straightforward strategy at its core, with the basic idea being to protect existing bets against potential losses. This is done by betting on outcomes that are different to the original wager. For example, you could bet on the favorite to win an upcoming football match having already bet on the underdog to win.
On the face of it this doesn’t seem like a very sensible thing to do, as betting on both teams to win a football match will usually result in a guaranteed loss. There are, however, some situations when hedging a bet makes a great deal of sense. The strategy can be used to reduce risk that you may no longer wish to be exposed to, and in certain circumstances can even be used to guarantee profits.
The Difference Between Hedge Betting and Arbitrage Betting
The primary difference between hedge betting and arbitrage betting is the way in which the two strategies are used. Arbitrage betting involves placing two or more wagers on different outcomes simultaneously. It can be used only when a discrepancy between the odds being offered by different bookmakers creates the right kind of opportunity. Its purpose is solely to guarantee profits based on that discrepancy.
In contrast, hedge betting involves placing additional wagers on a different outcome or outcomes subsequent to an original wager being placed. The strategy is usually used following some kind of change in circumstance. Its purpose, as we’ve already discussed, is to either reduce risk or guarantee profits.
When and why should you hedge?
Before you think about using the hedge betting strategy, you should understand why it can be beneficial to do so. We’ve mentioned how it can be used to reduce risks or guarantee profits, so let’s explore these two reasons in some more detail.
Hedge Betting to Reduce Risk
Hedge betting to reduce risk typically involves taking a small guaranteed loss to avoid the possibility of making a larger loss. There are a few reasons why you might want to do this, with the most common being that you have placed a wager and no longer have any confidence in it winning. This can be due to simply having doubts about why you placed the wager in the first place, or something could happen to affect your views on the chances of it winning.
For example, let’s say you placed a $100 point spread wager on the Tennessee Titans for an upcoming football match against the Tampa Bay Buccaneers. At some point before the game starts you have a change of heart about the bet, and no longer want to be exposed to the potential $100 loss. Maybe the quarterback has just got injured, or maybe your instinct is telling you that you made a bad bet in the first place.
Rather than let the bet ride, you could choose to hedge it by placing a $100 point spread wager on the Buccaneers too. Assuming the line hasn’t moved, one of the two wagers is guaranteed to win. You’ll lose a little bit of money as the odds for both bets will both be just below evens, but your loss will only be a fraction of the $100 you were originally exposed too.
Hedge Betting to Guarantee Profits
This type of hedge bet is placed when the odds of your initial bet have increased substantially in your favor, but you still have a feeling the initial bet could lose. When this scenario arises, the odds of the opposite side of your initial bet swing much higher in your favor. This allows you to risk less money on your hedge bet and receive a higher payout than you wager. Usually your hedge bet amount will be placed to win more money than your original bet amount. This allows you to cover your original wagered amount at bare minimum. The hedge bet won’t cost you nearly as much at this point in time, as the odds are much worse now than when the event started. With this method, regardless of which outcome wins, you walk away a “winner”. Remember: you don’t have to place a hedge bet. You can always let your original bet ride if you are confident in the outcome, especially after an event starts and appears to be going in your favor.
Hedging in play/live in-game
This type of hedge bet goes hand in hand with the guaranteed profit hedge bet. As an event progresses in real time, the probability of the two possible outcomes occurring changes. If the odds of your initial bet winning become significantly better, then placing a bet on the opposite side during an event will guarantee profits. Another reason to place an in-game hedge bet could be due to a superstar on the team of your original bet getting hurt in the middle of the game. The timing of this injury would affect the outcome of the game, and you very likely would not have wagered on that team originally if you had known their star player would be out. This strategy allows you to either lock in profits or mitigate losses in the middle of a game. Note: Remember to always shop for the most favorable odds. If an event is at a stoppage point – say halftime of a football game – sometimes the odds are different for the 2nd half lines when compared to the live game lines, but these are essentially the same exact bet.
Hedging parlay bets
This is very similar to the hedge betting discussed when wagering on futures. In a parlay bet, you need all elements to be correctly wagered on for the parlay to cash. As you add an event to a parlay, the odds of the parlay hitting and cashing are less likely. Each piece of a parlay is called a leg. As you approach the final leg of a parlay, you have the same hedge opportunity described in the futures scenario. The key to being able to hedge on a parlay bet is correctly wagering on your first bets within the parlay. If your parlay is 7 legs, and you have correctly wagered on the first six bets with one event left, you have an opportunity to hedge the final leg of the parlay in order guarantee profits. For the risk takers out there, you’re more than welcome to let it ride!