How To Hedge A Bet
Full Article at Oddsmarket: Basics Part 1: How To Bet Straight Bet: https://www.youtube.com/watch?v. Hedging a bet is only possible as we see a shift between opening and closing odds. Changes in the odds open up for hedging bets, meaning the potential loss is outweighed by the perceived gain elsewhere. This is why we see the term “Hedge fund” used on Wall Street today. As we see in many betting systems, it’s not the perfect system. If you do make an error when placing a wager, you basically have two options. The first is to simply let the bet ride, and hope that it ends up winning. This is not exactly ideal, as you’ll basically have risked money that you didn’t want to risk. That’s never a good situation to be in. 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.
How To Hedge A Sports Bet
In life, when someone hedges a situation they are limiting their exposure to the downside. In day to day life, someone can hedge many things.
When someone hedges in sports betting they are limiting their exposure to a potential financial loss. Hedging a bet is an advanced strategy used by sports bettors to either reduce the risk of a wager or to guarantee a profit of some kind from a wager.
Similar to middling a wager, hedging is a strategy that involves placing wagers on the opposite side of your original bet. As futures bettting has become more popular, so has hedging. New sports bettors might have heard about the sports betting risk management strategy in mainstream media.
If nothing else, hedging a bet has become a popular discussion point for any occasion when a sports bettor has a futures wager pending that could result in a large win. Hedging a bet is a way to guarantee at least some kind of win.
While there’s mainstream media coverage about hedging a wager, there isn’t much mainstream information on how to hedge a bet.
What is hedging a bet?
Hedging a bet is a strategy in which a bettor will place a second wager against the original bet when they’re unsure that the outcome of a wager will be a win.
Even if a bettor thinks they might win, they could decide to hedge a bet just to be safe and guarantee they walk away as a winner. The win won’t be as large but the additional wager is a way to create some kind of insurance if the original wager loses.
Hedging is a useful strategy even though betting on all sports isn’t the same. Futures wagers are long term bets that use a moneyline. Some individual games use a point spread while betting on other sports may involve a moneyline.
A bettor can hedge against any of these types of wagers. This strategy allows the bettor to walk away as a winner or less of a loser if they choose.
How to hedge a bet
Hedging a bet isn’t difficult. However, the concept isn’t at the forefront of everyone’s mind when placing a wager. Hedging a bet is protecting some kind profit that was — and still may be — possible from an original wager.
Hedging a bet is done by placing a second wager against the original wager that will guarantee that the bettor sees some kind of profit at the end of the event. A bettor can hedge a future bet or hedge individual games. Here’s an example of hedging a futures bet:
Original wager: $100 futures bet on the New York Jets to win the Super Bowl at 60-1.
- Potential win: $6,000 + original $100 wager.
- Hedge: $1,000 wager on Los Angeles Rams to win the Super Bowl at 2-1 when they face the Jets in the Big Game.
- Best result: Jets win the Super Bowl and bettor wins $6,000. The $1,000 hedge on the Rams for safety is a loss. The total win is $5,000 instead of $6,000.
- Hedge win result: Rams win and the bettor wins $2,000. After everything, the $1,000 hedge minus $100 original wager gives a final win of $900.
- Worst result: No hedge and Rams win. $100 wager and the potential $6,000 win is completely lost.
This example shows that a hedge on a futures bet is still a profitable wager. The hedge protects the bettor from losing the entire potential profit from the wager.
Hedging a bet means the original bet isn’t as profitable as it could be. However, winning something is better than losing everything. That’s the purpose of hedging a wager.
This example also shows that everything risked (the original $100 wager and $6,000 potential win) is lost without hedging.
Some bettors don’t mind losing the $100 wager and potential profit. There are other bettors that prefer to walk away with some kind of profit after waiting an entire season.
Other times to hedge a bet
Hedging a futures bet used to be the only time this strategy was discussed. Sports betting trends in the US are changing and so is how bettors use this strategy.
In Play wagering makes it easier to hedge against an existing pre-game wager that looks shaky. In the past, bettors had to wait until the middle of a game to place a halftime wager.
Parlay betting continues to become more popular every year. Bettors are now using the hedging strategy to ensure a win. A bettor will place a hedge on the final game of a multi-leg parlay to ensure some kind of positive result from a wager.
Depending on the amount of the original wager, a bettor might choose to hedge a little so they can mitigate a loss. Losing is never fun but losing less is better than losing everything risked.
Hedging a bet is a useful tool for any sports bettor. Gambling on sports does not have to be about winning or losing a wager. There are multiple strategies to use where a bettor can guarantee some kind of profit on certain wagers.
ALSO READ: Sports Betting Lesson: When It’s Smart To Hedge Your Bet
Find the best hedging opportunities at online sportsbooks
Hedging bets is something that is talked about more than it is understood. It’s also a concept that can be very dangerous because it can easily be used incorrectly in ways that negatively impact your bottom line.
Basically, hedging is just a way to reduce or eliminate the risk of a bet. You would generally look to hedge a bet when you are no longer comfortable with the bet you have made – i.e. you don’t think you have a particularly good chance of winning. The simplest example of a hedge is a bet on the other side in the game in question. Let’s say, for example, that the Yankees were playing the Red Sox, and you had bet the Yankees at -120. As the game neared, though, you became less certain that the Yankees were going to win. You could hedge that bet by betting on the Red Sox at +100, and you could do it in a number of ways. If you bet the same amount of money on the Red Sox as you bet on the Yankees then your only risk would be the juice you would have to pay if the Yankees won. If you bet less on the Red Sox than you did on the Yankees then you would be making a partial hedge bet – you would effectively be reducing the size of your bet on the Yankees. If you bet more on the Red Sox than you have on the Yankees then it’s as if you had just bet on the Red Sox.
That’s hedging in the most basic form, but there are ways that it can be more powerful, and therefore more interesting. One good example is with series bets in the playoffs. Let’s say, for example, that you had bet $100 on an underdog in the series at +200. You can bet series bets at the start of the series, but you can also bet them throughout the series – with adjusted prices according to the results so far. If your underdog wins the first game of the series then the prices and betting lines will adjust significantly – the favorite could fall all the way from -240 to -120. At that point you could bet $120 on the favorite to win the series. If the favorite does fight back and win the series then you would win $100 from your hedge bet, and still lose the $100 you bet on the underdogs, so you would break even. That’s a lot better than losing $100. If the underdogs continue on and win the series then you would win $200 on your original bet, but lose the $120 on your hedge bet, so you would have a profit of $80. You would have an upside of $80 with a downside of breaking even – you have definitely cut down on your risk. If you want to accept less upside you could even guarantee yourself a profit. If you made a $150 hedge bet on the favorite then you would make a profit of $25 if the favorite won, and $50 if the underdog won.
If you understand the concept then you also can see that you could do the same thing by betting on a game and hedging the bet with in-game betting. The opportunity to make a guaranteed profit happens surprisingly often, and even if that doesn’t work out quite right you can often limit the size of your loss.
So, with hedging we can limit our losses and often guarantee a profit. Sounds perfect, doesn’t it? Well, since it seems to good to be true there are obviously some real downsides to hedging. The first is that you often have to act fairly quickly to be sure to get the right price. Hedging can be a bit confusing to think about when you are first doing it, so it is easy to make a mistake when you are working fast. I’ve heard several stories about guys who thought they were hedging their bet but were actually increasing their exposure – and their potential losses. That can be a painful lesson.
More significantly, the problem with hedging is that you no longer have a chance to win your bet after you hedge it. Unless you made the bet specifically with the hope of hedging it (which would be a highly risky gamble) then you probably made it because you thought you had a good chance to win it – there was value. If the bet can be hedged that typically means that your team is doing well. That means that your bet has a better chance of winning then it did when you made your bet – you have even more value than you originally did. By hedging the bet you are throwing away all of that value – or at least most of it. Successful sports betting is all about maximizing the value of each bet. The more value you capture in your bets, the more successful you will be over the long term. If you are making sound bets and then hedging them then you might make a profit in the short term, but over the long term you are decreasing the amount of value you are capturing, and limiting your long term expectations as a result.
How To Hedge A Futures Bet
That’s not to suggest that hedging is always a bad idea. You just have to be very aware of what you are doing, and have a good reason for doing so. If you have a good reason to think that you don’t have the edge you thought you did – a matchup you were counting on dominating isn’t turning out that way, or a star player is playing like he is hurt – then a hedge can actually be a way to gain more value.