Sports Betting 101: Hedging Your Bet
Hedging your bet is not something people just do in the sports betting world; it is also a common life skill that people use to limit their exposure to the downside in a certain situation. In sports betting, hedging is an advanced strategy to limit potential financial loss or to ensure guaranteed profit, depending on the situation. Knowing how and why to hedge your bets can prove to be a very fruitful venture.
As futures and live bets have become more common practices in the gambling industry, hedging your bets has become a popularized concept.
What Is Hedging?
Hedging a bet is a strategy in which a bettor places a second wager against his or her original bet. Even if a bettor thinks they are going to win the original bet, hedging guarantees profit. The win won’t be as large but the additional wager creates something similar to an insurance policy in case the original wager loses. Similarly, taking the other side of your original wager that seems destined to lose is also an example of hedging your bet. Instead of guaranteeing profit, a bettor would be minimizing their losses by hedging. This strategy allows a bettor to walk away from a bet as a guaranteed winner or as less of a loser.
When To Hedge Your Bets
Futures Bets
Hedging is perhaps most popular among future bets. Future odds allow bettors to wager on a player to produce a certain stat by the end of the season or a team to make the playoffs or to win the Super Bowl.
Suppose a bettor decided to place $100 before the season started on the New England Patriots to win the Super Bowl at +2000 odds. If the Patriots made the postseason, their Super Bowl odds would be much lower than +2000. If the bettor decided to let this bet play out, they could potentially profit $2,000 if the Pats shocked the world and won it all.
If the Patriots make the Super Bowl, a bettor can hedge their bet by taking the Patriots’ NFC opponent on their second wager. As long as the bettor wagers enough to profit at least $100 if the Patriots lose in the Super Bowl, the bettor is ensured to make at least something regardless of the outcome.
- Potential Win: $2,000 on original wager + $100 initial wager on the Patriots
- Hedge: $500 on the Tampa Bay Buccaneers at +200 in the Super Bowl
- Best Result: Patriots win the Super Bowl and bettor wins $2,000. The $500 hedge on the Bucs for insurance is a loss. The total win is $1,500 instead of $2,000.
- Hedge Win Result: Bucs win and the bettor wins $1,000. After everything, the $500 hedge minus the $100 original wager gives a final win of $400.
- Worst Result: The bettor doesn’t hedge and the Bucs win. $100 wager and the potential $2,000 win is completely lost.
In the above example, hedging a futures bet protects the bettor from losing the entire potential profit. Although hedging means the original bets won’t make as much money as it could, many gamblers decide that winning something is better than losing everything.
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Live Bets
Live betting provides one of the best opportunities to hedge your bets. Perhaps you make a bet against the spread on a favorite who is easily covering in the first half. A bettor might decide to make a live bet on the underdog (who is getting way more points than before the game due to the current score). In this scenario, you would be hedging against a possible comeback or “backdoor cover.” Before live betting, bettors had to wait until a period or a half was over to hedge their bets. Live betting has opened up all sorts of new opportunities.
Parlays
Parlay bets are some of the most exciting wagers in the gambling industry. There is nothing more thrilling than watching the final leg of a massive parlay. If you are a seasoned gambler, you have likely had the final leg of a parlay lose and negate all of your succesfull early bets. Hedging is a critical strategy in the world of parlay bets.
Let’s say that you placed a five-team parlay and the first four legs have already hit. Maybe you are looking at a payout of 25:1 (or maybe even better). Instead of risking the entire potential profit on the final leg of the parlay, an experienced sports bettor would use this opportunity to bet a significant amount of cash AGAINST the team that is part of your five-team parlay. This would ensure profit, as long as the hedge is for more than the initial wager.
Hedging is an important part of sports betting. Personally, I take advantage of hedging opportunities whenever they present themselves. Losing money is never fun. If I can ensure potential profit, I’m going to do it. Ultimately, the choice is yours as to whether you want to hedge your bets. If you are extremely confident, perhaps it makes sense to “let it ride.” But if you suffer a bad beat, remember that I told you about hedging.
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