Hedge Betting in Sports: Risk Management Strategy that You Need to Know

Hedge betting is one of the most common practices in sports betting, with reasons for its usage varying from one person to another.

The bottom line for hedged bets is, however, pretty straightforward–mitigating the damage of a poor wager or reducing/eliminating the risk of a given bet and securing winnings.

Check out everything about how to utilize hedge betting to secure profit and or cut losses.

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Did you Know About Hedge Betting in the Sports World?

Sports betting is akin to stock market picking in one significant way.

When we bet on sports and when we play the stock market, we can hedge our bets.

Stock investors hedge by buying call or put options on their stock positions or short positions.

Hedging in sports betting works a similar way.

Except in sports betting, our stocks are teams to cover the spread or to win championship titles like the Super Bowl.

Basically, hedging entails betting on both sides of an event, often done separately, with the aim of avoiding losses in risky bets.

For example, you can bet on the Pittsburgh Penguins (-110) to win an NHL game against the New York Islanders (+100), but a couple of hours later, you realize that Penguins.

Due to an injury of a key player or the suspension of a goalie—are now likely to lose game.

In such a case, you can decide to bet on the Islanders at +100 with the aim of recouping your losses in case the bet against the Penguins fails to go through.

This act of betting in the other side of the event is what we call hedging.

Hedge Betting Primer – What’s a Hedge Bet?

Hedge betting is a risk management strategy that allows bettors to minimize potential losses or lock in a profit by placing a second bet that opposes their original wager.

This approach is commonly used in various types of bets, including future bets, parlays, live bets, and moneyline wagers.

Bettors hedge their bets for two main reasons:

• To secure a guaranteed profit
  If a bettor has a strong potential win but wants to guarantee earnings, they can hedge by betting on the opposite outcome.
• To minimize risk and potential loss
  If a bet is looking uncertain, hedging can help reduce exposure to a complete loss.

For example, if you placed a bet on an underdog early in the season and that team makes it to the championship, you might want to hedge by betting on the opposing team in the championship.

Let’s say we bet on the Chiefs to win the Super Bowl in 2025 at the beginning of the season.

Once the Chiefs made it to the Lombardi Trophy game, we placed a smaller bet on the Eagles to win.

The key, and we dive deeper into this later in the article, is to hedge the right amount to ensure profit.

Sometimes, this isn’t possible. So we hedge to cut potential losses, which is another strategy we can employ.

How to Hedge a Bet – Hedging a Bet Example

Hedging a bet involves placing a secondary bet to counterbalance your original wager.

This can be done before an event starts or through live betting, where odds shift as the game progresses.

Example 1: Hedging a Future Bet

Imagine you placed a $100 bet on Team A at +500 to win the championship.

If they win, you’ll profit $500 because the total payout is $600.

Now, they’ve made it to the championship game, but their opponent is favored.

You decide to hedge by placing a $250 bet on Team B at -200.

Possible Outcomes:

1. If Team A wins:

• Original bet wins: $500 profit
• Hedge bet loses: $250 loss
• Net profit: $250

1. If Team B wins:

• Original bet loses: $100 loss
• Hedge bet wins: $125 profit (payout of $375, minus $250 stake)
• Net profit: $25

By hedging, you’ve guaranteed at least a small profit no matter the outcome.

You’d prefer Team B to win but by hedging, you ensure you profit $25 if your original bet comes up short.

The most important aspect of hedging is that you don’t lose money or you at least don’t lose as much as you would by not hedging.

Example 2: Hedging a Live Bet

Let’s say you placed a $200 bet on Team A at +200 before the game started.

Team A takes an early lead, and the sportsbook adjusts the odds:

• Team A is now -150 to win
• Team B is now +150

At this point, you can hedge by betting on Team B at +150 to ensure you profit no matter what happens.

Hedge Betting Example Breakdown – What Does Hedging Mean in Betting?

Hedging in betting means strategically placing an opposite bet to your original wager to either secure a profit or reduce risk.

When Should You Hedge?

• Big Odds Movement:
  If the odds have shifted significantly in your favor, it might be a good time to hedge.
• Future Bets:
  If a long shot team reaches the final stages of a tournament, locking in a profit by hedging is a smart move.
• Parlays:
  If you’ve won several legs of a parlay and only have one bet left, you can hedge to guarantee a return.
• Live Betting:
  If your original bet looks like it might lose based on in-game momentum, hedging can reduce losses.

Advantages of Hedging

Even in cases of where an event has a clear favorite, like Lewis Hamilton at one point to win a Formula 1 tournament.

Betting on that market leader comes with the risk of tying up a significant amount of your bankroll for at a high risk and a relatively small reward.

And in certain instances, this main player gets injured mid-way through the tournament.

To avoid all that risk, you can scope for a different player that looks likely to win and place your bet on him a well, offering a chance to minimize your losses.

Profit in Hedging

In other cases, hedging allows you to actually profit more than you would have done one bet.

For example, in an NFL game, you may bet on the New England Patriots to win a game straight up in the moneylines.

Since their opponent (let’s say Denver Broncos) is likely to keep the game close, you also decide to bet some money on the point spreads lines, at +8.

In the instance that New England wins the game by 5 points, you not only get the money for backing the Patriots on the SU lines.

You also get paid for backing Denver on the ATS lines (because they cover the spread as 8-point underdogs.

The other instance of racking up better profits is in instances that you are able to hedge bets on good-value underdogs, or joining a couple of hedges for a parlay bet.

Another crucial advantage of hedging is the platform that comes with live betting.

For example, if you had money on the Boston Red Sox to win a game.

You notice quarter-way or mid-way through the game that the Red Sox are trailing in a manner that they can’t get the win, you can bet on the opposite side to help cut your losses.

Risks and Final Remarks on Hedged Bets

Whether or not you win two hedged bets or simply one of your hedged bets goes through, a loss of some sorts is inevitable for you.

Since the bookmaker always takes a percentage of the winnings through the “vigorish’ or “juice,” that is usually added to all bets.

Also, in the instance that you also hedge bets on an event with several participants.

Like the Super Bowl, and the teams you picked in your bets don’t win, then you lose a bigger chunk of your bankroll than you’d have done by backing one loser.

It is based on such risks that many professional handicappers advise against hedging bets.

That, however, is not to say that hedged bets are always bad.

If you have a good reason to think that you don’t have the edge as you thought you would.

Due to reasons such as roster changes, injuries, suspensions or poor starts in a game.

Then a hedged bet could actually be a way to gain more value or reduce your losses, as has been explained above.

Hedge Betting Strategy to Ensure Profit

To hedge effectively, follow these strategies.

Calculate the Optimal Hedge Bet Amount

To ensure the best outcome in your bet, calculate exactly how much you should bet when hedging.

You can use a hedge betting calculator or follow a hedge betting formula.

Hedge bet amount = original bet amount x original odds / hedge odds +1

For example, if you bet $100 on Team A at +300 and now want to hedge with Team B at -150, your hedge bet amount should be:

$100 x 3 / 1.5 x 1 = 300 / 2.5 = 120

So, you would bet $120 on Team B to minimize risk.

Take Advantage of Live Betting

Live betting presents great opportunities to hedge when odds fluctuate.

If your original team starts strong, you might find favorable hedge odds mid-game.

Be Selective – Don’t Over Do it by Hedging Too Much

Not every bet requires a hedge.

If your original wager still holds strong value, it may be better to ride it out instead of cutting into your potential profit.

Use Hedging in Parlays

If you’ve won multiple legs of a parlay and only have one game left, consider hedging.

This way, you avoid the risk of losing everything if the final leg fails.

Hedge betting is a smart sports betting risk management strategy.

While it’s not always necessary, knowing when and how to hedge can help secure profits and reduce losses.

Whether you’re betting on futures, live games, or parlays, hedging can give you more control over your wagers and maximize long term success.

The key is to know when to hedge and to know when to sit on your hands.

Refer to this article to figure out the best times to hedge your wagers.

MyBookie’s Sportsbook Betting Guide | Hedge Betting

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