What Is Hedging in Sports Betting?

Updated: When someone may hedge on a bet and other instances in which you hedge on a bet.

You probably got involved in the game of sports betting due to its rising popularity. You have heard that this aspect of gambling is quite flexible, thereby increasing your winning chances and ensuring that you get rewarded for every good move? However, you are still yet to figure out what this flexible means.

Does this sound familiar? All that you really want is a means by which you can get a reward for every good move you make.   

You can be assured that hedging is the go-to technique for this. In this article, we would discuss all that you need to know about hedging in sports betting; what it is and how to go about it. 

What Is Hedge in Sports Betting?

Either as a new sports bettor or one who is used to the game, you have probably heard of the word ‘hedging’ at a point in your play. It is one of the most common sports betting methods that both amateur and professional gamblers would discuss. 

Hedge betting is a kind of risk management. It allows you to gain money even if your first wager is unsuccessful. To do so, you place a wager on the opposite side of the first bet's outcome. Hedging your bets might be frightening at first, but when done correctly, it can assist you to ensure profits, reduce risk and variance, and provide you with the flexibility to adjust for changes in your forecasts.

Hedge betting is most often a factor of the bettor’s personal taste. Some bettors would rather have a positive payout than risk everything, which is when hedging makes sense. There's no reason to hedge if you're committed to your initial gamble and don't mind a potential loss if the other side wins.

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Hedge Definition

A hedge is a strategy for lowering risk and ensuring potential profit on a certain wager. It refers to wagering the opposing side of your initial wager in order to either try to break even the game or lessen the original bet’s negative risk.

The goal of a hedge is to ensure a potential win or, at the very least, to limit or eliminate the risk of losing everything. When a gambler is unsure about the result of a wager, hedging a bet is a method in which they put a second wager against the initial bet. Even if a bettor believes they have a good chance of winning, they may elect to hedge a wager simply to be cautious and ensure they walk away from a winner. The win will be smaller, but the new gamble serves as insurance in the event that the initial wager fails.

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Futures bets are long-term wagers that are placed on a moneyline. A point spread is used in some individual games, whereas a moneyline is used in other sports betting. 

When someone may hedge on a bet

The primary reason for hedging on a bet is to protect an asset and/or minimize loss. One example of hedging is betting on a team that has long odds to win it all. Let us use the current NFL season. If an NFL team has +1000 odds of winning the Superbowl. You would receive $1000 on a $100 wager if that team does make it to and win the big game.

Then, on the day the sporting event takes place, you could also place a bet on the opposing team if the bet does not exceed the money you would win on the longshot. 

Another example of hedging a bet pertains to basketball. Let us use the two teams that played in the 2022 NBA Finals as an example. If the Boston Celtics were a huge underdog for winning that series, one could bet on them to win the series with a reasonable set of odds. If Boston took both games of the series, you could then shift your bet over to the Warriors, because their odds of winning will have decreased, given that fact they would be in a 2-0 hole. Using this example and depending on if the odds are favorable or not, a better could potentially make a profit regardless of which team wins the series. 

Other instances in which you hedge on a bet

Parlay bets include yet another example of when to hedge on a bet. In this scenario, let us say you have a three or four-team parlay and you have successfully picked all but one of those games. You are on the verge of a huge victory. But it could all go downhill if you lose the last leg of the best. One available option to help alleviate disappointment is to place a bet against the team you have in that final parlay spot with an outright bet. If you win the parlay all is well. But even if you lose the parlay, and win the straight bet, you still come out on top in this example.

Lastly, the most common reason for hedging is that you want to get out of a bad bet. There are two different ways to do this. The first method includes placing a bet on the opposing team before the game starts.

Another method is to use live-in-game betting. Using a recent NFL game as an example. The Baltimore Ravens (8-4) will be playing a road game against their division rival Pittsburgh Steelers (5-7). Based on how the teams have performed this season, you bet on the Ravens to win the contest. But in an ironic twist of fate, the Steelers go up by three touchdowns, prompting you to regret the decision you have made.

Thanks to in-game betting, though, you can still find a way to make a few dollars even if your bet did not pan out as planned. This is one of the many reasons why this method has become so popular in the betting vertical.

Why Should You Hedge a Bet?

There are two major reasons why hedge betting is used in sports betting, there are;

To Reduce Risk of Loss

Reducing the risk of loss in hedge betting is done by actually allowing some calculated loss in a bid to prevent the occurrence of a bigger loss. The major explanation for this is that you have placed a wager and no longer believe it will win. This might be because you're unsure why you made the wager in the first place, or something could happen to change your mind about the odds of it succeeding. 

A typical example is this; an original $100 pointsbet in a match between the Titans and the Buccaneers. You initially placed the bet on the Buccaneers winning. Along the line, however, you had a change of mind because some factors came up pointing to the possibility of a loss and you do not wish to bear the original risk of a $100 loss. Therefore, you decided to bet hedge it by placing an equal pointsbet on the Titans also, knowing fully well that one of the two teams would definitely get a win. Because the odds for both bets are slightly below evens, you'll lose a little money, but it'll only be a portion of the $100 loss you were initially exposed to.

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To Increase the Chances of a Profit

If properly utilised, hedge betting can be used to assure players of a win. This is also dependent on the type of wager made. A typical example in which you can achieve this is; if you place an original wager on a team to win the Super Bowl at the beginning of the season. Hedging your bet here would mean that you went on to bet on the opposite side of the original one after your team might have made it to the finals. If the arithmetic is correct, you may construct a circumstance in which you make a profit regardless of which team wins.

How to Make a Hedge Bet?

Hedging a bet is placing a second stake against the first bet in order to ensure that the bettor makes a profit at the conclusion of the event. A gambler can hedge a future bet or specific games. An example of hedging a futures bet is as follows:

1. The first step is to confirm that you do actually wish to protect your wager. You are not required to hedge all of your bets. You may leave a wager alone if you are confident that it will be successful. 
2. If you are convinced you want to protect your wager, you must first choose how you will do it. You can choose to protect simply the closest result or all of them. For example, you may ensure a home soccer victory by placing a draw bet (X) / a double probability away victory and draw wager (X2).
3. Find a reliable sports betting site such as Betmgm for your hedge bet. Not all casinos offer sports betting to their players, as such, ensure that you find a perfect site before you begin.
4. Pick your preferred wager based on the stake size. Always set stakes that will allow you to at least break even.
5. Make your wager.

Hedge Betting Examples

A typical example of hedging in a sports bet is this; 

1. A basketball tournament game. Assuming that you placed a +1000 bet on a Kansas win at $10 to win $100 before its start. At the point of the final four, Kansas was still in the team. Therefore, your wager is starting to look good such that the team is listed at a +180 to win the national championship. 
2. You can now choose to wait and watch your bet play out or hedge at this point. A hedge bet at this point is placing another -250 bet that Kansas would lose the tournament at $25 to win $10. This hedging would ensure that you definitely get some kind of profit irrespective of what the outcome is even though your potential win would be reduced if Kansas goes on to win. 
3. In summary;
4. Without a hedge, a Kansas win means a profit of $100 while a Kansas loss means a loss of $10
5. With a hedge of $50 to win $20 on Kansas losing, a Kansas win means a profit of $100 minus $50 which is $50 while a Kansas loss means $10 minus $20 which is an end profit of $10.

By this, you can see that a hedge helped to ensure that there was a win irrespective of the final outcome. 

What is Moneyline in Betting

Another example is hedging a futures bet on an individual game;

1. You place a $100 futures bet on the New York Jets winning at 60-1. At the point of a potential win of $6000 in addition to the original $100 wager, you then go on to make a hedge bet of $1000 on the other team winning the game at 2-1. 
2. In such a case, a win from the Jets team would be a total profit of $5000 instead of $6000 as the $1000 hedge bet was used as insurance. However, a win from the o0ther team would mean that you end up with a $900 profit which is the $100 wager subtracted from the $1000 hedge. A scenario where the hedge bet was not done and the other team ended up winning would mean that you lose both the original wager of $100 and the possible profit of $6000, going home with no win at all. 

From these examples, it can be seen that hedge betting is a means to ensure that the bettor at least takes something home. 

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Best Sports for Hedge Betting

Hedge betting can be done in different sports types. Some of these sports are football, baseball, basketball, hockey and many others. 

NFL hedge bets

A typical NFL hedge bet would be a matchup between the Patriots and the Bills in a season. The moneyline can reveal the two teams as +110 underdogs in the different sportsbooks, meaning that you can win $110 from a $100 wager, depending on the bet that wins. Therefore, irrespective of the result of the game, there would be a potential profit of $10 because one of the two bets will definitely make a win. NFL bettors can look out for instances such as this as there would definitely be a profit. 

NBA hedge bets

A typical NBA hedge bet is that explained earlier in this article between Kansas in the tournament game. Following the steps broken down will be an advantage for the player. 

MLB hedge bets

To make a hedge betting in a baseball game work, just divide your initial wager so that you can cover your losses if a favourite only wins by one run. Making sure that your wins from your money line bet balance out your losses from your run line bet are the most important component of this whole thing.

Best Hedge Betting Strategies

Hedging is possible with nearly every type of wager. Futures bets are the most common way to hedge, but in-play betting is also at an all-time high as sports betting increases. Hedging with an in-play bet might be done if a bet isn't looking favourable midway through a game. In this situation, it's critical to consider all possible outcomes in a game since if you make the improper hedge, you might lose both bets if something unexpected occurs.

A parlay is another option for hedging. Fortunately, they are a little easier to understand than an in-game hedge. In a three-team parlay, the easiest illustration is if your first two bets win. If you want to ensure that you win, just hedge by betting the other side in the parlay's third bet. You'll almost certainly win, albeit the amount will be smaller.

Basic Tips To Follow In Hedge Betting

As much as hedging is a great means of ensuring a win for you in the outcome of a game, there are some instances where hedging is not exactly needed as there is not much of a result. Betting live on a spread, Moneyline, or Over/Under is a great example of this, it is against a main-line single bet made prior to the start of the game or at the end of a parlay that needs it.  this is because they can be quite confusing to manage with unexpected results. As such, it is just better to stick to the normal straightforward bet and hope for the best.

Some of the tips to follow are; 

1. It is not compulsory to hedge; you can choose not to hedge due to personal reasons of yours or even no reason at all and that is absolutely fine. 
2. Always ensure that you have the numbers are all right before taking any action; Hedging is a strategy in which you have to know your numbers and be good mathematically before taking any step.  
3. Ensure that you have enough money to sustain yourself through a hedge bet strategy.

Conclusion

Players take different decisions that they think suit their betting preference best. No player is mandated to follow a specific strategy or action. This is the same with hedge betting. Hedge betting is a personal wagering preference that is quite popular among the more cautious bettors. These set of bettors tend to hedge their bets and take money that is guaranteed. Players should be allowed to determine which method to gamble with based on the amount of money they want to win and go for their preference. 

Hedge Betting FAQ

What does it mean to hedge bets?

Hedge betting is a kind of risk management. It allows you to gain money even if your first wager is unsuccessful. To do so, you place a wager on the opposite side of the first bet's outcome. Hedging your bets might be frightening at first, but when done correctly, it can assist you to ensure profits and reduce risk. 

What is an example of hedging a bet?

A typical example of this is a $100 futures bet on New York Jets winning a game at 60-1. After which the player then goes on to place a hedge bet of $1000 on the opposite side at 2-1. However, a win from the other team would mean that you end up with a $900 profit which is the $100 wager subtracted from the $1000 hedge. This helps the player to earn a win. 

How do you hedge a bet?

To hedge a bet means to wager the opposing side of your initial wager in order to either try to break even the game or lessen the original bet’s negative risk.

Is hedging your bets illegal?

Many players hold back from partaking in this strategy out of the fear that it is unlawful. Well, hedge betting is not unlawful in any way. Hedging your sports bets is not only legal, but it may also be a smart technique for reducing risk, ensuring profits, and ensuring that you have enough money to gamble the next day.

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