Hedging Bets

By
• Learn The Lines
• May 17th, 2022

Hedging bets can be a very logical and profitable tactic when it comes to sports betting. A method used by seasoned bettors to ensure they are making money on their bets but also a valuable strategy to learn for those just starting out in sports betting. Our hedging bets guide will explain exactly what hedging bets means, how it works and the pros and cons of it in the world of sports betting.

What is hedging bets? 

Hedging bets is a clever tactic used in order to ensure you make profit on your bet when you’re winning but there is still a chance it could lose. By hedging a bet you wouldn’t win as much as you would if you were to let your bet run and it wins, but it ensures you make some form of profit whatever the result. 

How does hedge betting work?

As an example of when you might consider hedging a bet, let’s say that we’ve placed a futures bet on the LA Clippers to win the NBA Championship. We had a $10 preseason bet on it at odds off +2200, if the Clippers do indeed go on to lift the Larry O’Brien trophy we would stand to win a total of $230 off our $10 stake. 

However let’s say the Clippers make the play-offs which means their odds to win the NBA have been slashed drastically and you may only see odds of around +210 on them at this point. You may be offered a cashout by your nominated sportsbooks at this point, which you might consider. However you might choose to hedge your bet on the Clippers which basically means you bet on them NOT to win the NBA Championship you will generally be offered fairly short odds on that, as you have the true odds on your side. 

Let’s say the odds on The Clippers to NOT win the NBA Championship is -150. 

We know by letting our Clippers bet run, if they win the NBA we stand to cash in $230 from our $10 stake. We might decide to place a $50 hedge bet on them NOT to win the NBA at -150. A $50 bet on the Clippers NOT winning the NBA would return $75. 

Although you would have to sacrifice $50 of your potential winnings on the Clippers winning the NBA you know whatever happens you would be in profit. A breakdown would look like this:

$10 on NBA Clippers to win the NBA at +2200 = $230 

$50 on Clippers NOT to win the NBA at -150 = $75

So you’ve laid out a total of $60 but whatever happens you will make profit. In an ideal world the Clippers would go onto win the NBA and you would make a much more sizable $170 profit when you subtract the $10 original stake and $50 hedge. 

If the Clippers fall short, you will win your hedge bet and return $75, making $15 profit on top of the $10 you staked on the Clippers winning and the $50 on the hedge.

Hedging bets: What are the pros and cons?

You have to make an informed decision whether you should hedge a bet as ultimately every time you hedge you are eating into your potential profit of your original bet. However hedge betting can be a sensible option as you ensure you walk away with profit (however big or small) and ultimately beat the bookie. 

Pros:

Opting to hedge when you’ve backed an underdog: You might have fancied an underdog to beat a favorite before the contest and secured good odds on that to happen. Let’s say the clock is ticking and the underdog is narrowly ahead and you’re winning your bet but you know the favorite is strong and they have the quality in their roster to overturn a scoreline. In this scenario a sensible thing to do would be to hedge as you know you stand to win a generous amount of money on the underdog if it wins but by placing some money on the favorite, whose odds would now have drifted (increased) as well you know you’ll be returning profit however it plays out.

Safeguarding your bet against external influences: Sometimes things can happen over the course of a season that changes a team or players fortune. We’ve all probably witnessed great collapses in sport and you don’t want your selection to be another case of a player or a team throwing it away when they are ahead. You have to factor in things that can happen such as injuries and coaches and players moving on which drastically change the campaign and be a key driver for bad results. Sometimes when you’re ahead it’s best to place a hedge just in case the unthinkable does happen.

Cons:

Eating into your potential winning bet profit: When you place a bet in the first place you must have been confident in that selection or thought it was good value, or you wouldn’t have put the bet on in the first place right? So although there are clear benefits to hedging and ensuring you make profit, however big or small, if your original bet goes on to win, than effectively by hedging you’ve given some money back to the sportsbook. So you need to weigh up things like; how likely your selection is to go on to win and how far ahead they are and the likelihood of them losing from that position. If the answer is that they are flying and it’s unlikely they’ll be caught then you may opt to avoid hedging completely and let your original bet run to maximize profit.

Cashout may be a better alternative to hedging: Cash outs are a neat feature offered by most sportsbooks, whereby you are offered an amount to cash out and settle the bet. If your bet is losing you are likely to get a much lower cash out offer compared to what you staked. However if your bet is winning and time is running out the cashout will be above your stake and much closer to the full amount of your bet return. So if your bet is ahead you need to work out if it is a better option to hedge or to cashout, as one may mean you only have to sacrifice a smaller amount of your potential profit than the other, so it’s worth looking to see what option will mean you walk away with the most profit.