Hedging In Sports Betting
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|‣||What Is Hedging In Sports Betting|
|‣||When You Should Hedge Your Bet|
|‣||The Pros And Cons Of Hedging|
Chances are, you’ve once placed a bet that you were unsure of. If not, you’ve probably found yourself in a situation where you’re thinking of backing the opposite side of a wager to either cut back on potential losses or secure a profit, especially in the case of parlays and futures.
These situations are common struggles that bettors deal with daily. However, there is a strategy that has gained momentum in recent years.
In certain scenarios, it makes sense to back the opposite of what you’ve placed, especially if you’re in a situation where you’re guaranteed a profit if you back the opposite pick.
This strategy is commonly known as hedging.
What Exactly Is Hedging?
Hedging is a common financial term that means safeguarding one’s investment by balancing different transactions.
By doing this, you protect yourself from a loss because you balance transactions in a way that you’re guaranteed a profit.
In sports betting, it simply means backing a different result from what you originally wagered.
This is commonly done in situations where you have a chance of guaranteeing a profit. Other times, you can hedge a bet to reduce potential loss or to break even.
The example below will give you a better understanding of what hedging is.
Examples Of Hedging
Here’s a great example of what hedging is:
Let’s say that you place a $100 futures bet at the start of the season on the Dallas Cowboys to win the Super Bowl at odds of +1200.
The Cowboys play well during the season and end up reaching the Super Bowl. If they win, you’ll have a total payout of $1,300.
However, they face the Kansas City Chiefs in the Super Bowl, so there’s still a great chance that the Cowboys might lose.
So you have two options at this point: stick with your initial wager, or hedge your bet.
Since you’re cautious, you decide to hedge your bet. The Super Bowl Odds are as follows:
Dallas Cowboys – (-159)
Kansas City Chiefs – (+140)
If you place a $500 wager on the Chiefs, you have the potential of cashing out $1,200.
So your total investment will be $600, and you now have the chance of winning $700 if the Cowboys win or $600 if the Chiefs win. So, in either case, you’re guaranteed a profit.
However, if you don’t hedge, you might win more if the Cowboys win, but you’ll gain nothing if the Chiefs end up lifting the Super Bowl trophy.
You also can use a hedging calculator to make sure your math is correct.
Should You Hedge Your Bet?
There’s no definitive answer on whether you should hedge your bet. Various factors come into play that will help you decide whether you should hedge your bet.
Here are a few factors to keep in mind if you’re thinking of hedging a bet:
- Personal preference.
- The amount that you’ve risked before hedging.
- Mathematical calculations involved.
- The amount that you stand to gain/lose.
Of course, you have to find yourself in a situation that presents itself to hedging. If you’re really into hedging, you may have to do many mathematical calculations to see whether hedging makes total sense since many situations won’t present themselves directly.
In our opinion, go with what makes perfect sense to you. If you’re in a situation where you can guarantee a large sum of profit by hedging, then you should definitely go for it.
On the other hand, if you just placed a small, harmless wager for fun, there’s no harm in letting that bet ride.
So always study each situation individually, as that will help you weigh all of your available options.
Hedging And In-Play Betting
Hedging has been made easier by in-play betting. You can find ways to minimize losses or guarantee a profit by betting live as you watch a game.
If your wager doesn’t look like it’s going to win, you can place a counter bet at half-time to try and claim a few coins back.
However, keep in mind that in-play situations require fast thinkers.
Since you don’t have a lot of time to carefully weigh your options, ensure that what you’re going for is beneficial to your current situation. Remember that if you make a wrong hedge, your losses could be doubled.
For example, let’s say that your initial wager was a point spread bet. You decide to hedge your bet at halftime by going for a moneyline bet because there’s no available point spread option during live betting.
Since both options are different, you’re risking more, and there are plenty of scenarios where you could end up losing both bets.
Hedging And Parlays
Hedging is mostly common with futures bets, but you can also hedge your parlays.
Let’s say that your 5-game parlay has one leg left; you have the option of backing the opposite side of your last selection to guarantee a profit instead of letting the parlay ride.
Though you stand to win less, you’ll still be guaranteed a profit.
Pros & Cons Of Hedging
There are various pros attached to hedging. Some of these include the following:
- You guarantee a payout regardless of the final outcome.
- It helps you improve your handicapping.
- When utilized perfectly, it can help you minimize losses.
- Hedging can help build your judgment, especially when it comes to picking sports bets.
However, there are a lot of downsides to hedging. Some of the cons include the following:
- Some hedging situations require a lot of mathematical calculations.
- Sometimes the profit earned may be negligible.
- You end up forfeiting a large sum of profit if your initial wager wins.
- Hedging situations may be hard to come by.
Final Take On Hedging
Hedging allows bettors to protect themselves by minimizing their potential risk. Since most bettors are mostly interested in making a profit through their sports bets, hedging can be great in helping bettors achieve such goals.
However, to fully reap the rewards of this strategy, you need to make sure that you approach hedging methodically.
Since there’s no one-size-fits-all approach to hedging, you should always weigh how much you stand you win and the amount of risk involved before hedging one of your initial bets.
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