Hedge betting is all about guaranteeing a profit and minimising risks. It works equally well on the stock market and in sports betting, lending to its popularity in both niches. As a sports gambling strategy, when used wisely, hedging bets can produce marvellous results. Since all good sports betting sites support this form of gambling, let’s check what this strategy actually entails.
Discretion Is the Better Part of Valor
As we already mentioned, “hedging” is a strategy of reducing risks and guaranteeing a payout. When it comes to betting on sports, it simply means placing a second bet against the first one. In other words, it’s betting the opposite side of your first wager to reduce the risks of the original stake. It’s widely used in sportsbooks and online casinos.
Any time a punter is unsure about the outcome of their bet, or they want to secure a win, they’ll turn to this strategy. Used wisely, hedging guarantees that a bettor finishes the game as a winner and reduces gambling risks. Hedge bets are used mainly in future betting, where a future wager could become a win.
This strategy is not valuable for players who like to play risky and are not concerned about losing their betting funds. That being said, with less risk come smaller rewards, too. It is also not a foolproof method, as that would drive bookies out of business. Let’s see with a few examples how hedging works.
The Houston Texans Dilemma
Let’s say you bet on the Houston Texans winning the Superbowl against the Tampa Bay Buccaneers and place $100 on a 50-1 futures bet. You could win $5,000 (plus retain your wager), but only if you win, of course. To reduce the chances of walking out empty-handed, you also place a $500 bet on the Tampa Bay Buccaneers as a part of the bet-hedging strategy.
The bets on Tampa Bay Buccaneers are 2-1, so you place a $500 bet on them as well. If the Houston Texans win, you’ll get $5,000 but lose the $500 hedging bet. In the end, you walk out with $4,500 in profit, which is the best scenario.
If your hedge strategy comes to fruition instead, and Tampa Bay Buccaneers win, you earn only $500. Once the $100 stake from the first bet (which you’ve just lost) is deducted, you end up with $400 in total. The worst-case scenario is that if no one wins. In that case, both of your bets will have failed, and you’ve just lost $600 in wagers. Most online casinos and sportsbooks prefer to allow hedge bets on events with multiple outcomes that can mess up your wagers.
Hedging techniques take some time to get used to, but hedge betting is straightforward. There is a good chance you’ll end up with a bet payout, and it’ll save you from the potential profit loss. Remember that hedging is not one of the most profitable sports betting systems around – depending on how your bets work out, you’re guaranteed to lose some money, plus the payouts won’t be as big for your wins.
Waiting for the Perfect Moment
There are several hedging types, and each one is useful in different contexts. Knowing when to place your hedging bet is key to ensuring a big win.
- Hedging future bets – For punters looking for a big profit, these types of hedging bets in sports are the most commonly used ones. Most of the time, future bets have good payouts in prop bets such as the division, conference, or championship winner in playoffs for any sport. If you wager on your team winning the Super Bowl in the NFL, and that team reaches the championship finals, you can hedge a futures bet before the start of the match.
- Hedging for guaranteed profits – If the odds of the original bet have grown in the bettor’s favor, they can put down a hedging bet if they still think the primary bet might lose. The hedge bet amount is wagered to win more cash than the original bet. Hedging bets should be more affordable momentarily since the odds will be worse at this point than at the start of the event. So long as either side wins the match, the bettor will pocket in a wagering profit.
- Hedging when events change – Anything can go wrong after placing a bet and before the match starts. Weather changes or a key player getting sick and missing out on the game can drastically affect the match’s outcome. In such cases, placing hedging could mitigate the potential loss of the original wager and help to break even.
- Hedging during the game – This type of bet works well with hedging sports bets for guaranteed profits. As the game goes on, the probability of winning a bet changes too. Suppose the odds of the original bet increase – placing a bet on the other team during the play will almost guarantee profits.
- Hedging to reduce potential losses – When the chances of cashing in the original bet get lowered at the very start of the game (star player gets injured, a goal is scored, or someone gets sent off), bet on the opposing team to cover your losses.
- Hedging parlay bets – Unlike hedging futures bets, you have to bet correctly on all events to profit from a parlay bet. Every new event that you add to the parlay is called a leg. Every leg reduces the odds of the parlay being successful and profitable. It is why it’s crucial to wager correctly on your first bets of the parlay, allowing you to hedge the final leg of the parlay bet to reduce losses if it falls through.
One last hedging bet to cover is the arbitration bets, also known in gambling circles as “miraclebets,” “surewins,” or “surebets.” Of all hedging types, arbitration bets are the most rarely used ones. If you want to make money with hedging bets, you have to be patient and knowledgeable about the bookmakers’ assessment of potential game outcomes.
Arbitration betting is placing a bet on each of the two possible outcomes at different sportsbooks due to the bookmaker’s disagreement on the event’s outcome. You are betting on events that guarantee a profit, regardless of an event’s outcome. Let’s go into details about how and why arbitration bets work.
Similar yet Different
Bookmakers employ similar data to make opening odds for an event. Therefore, most sportsbooks have similar event odds, similar underdogs and favorites in a match, and a comparable spread. However, there are cases when bookmakers view the event outcome differently. Some bettors use this opportunity to define their hedging bets.
A chance for an arbitration bet shows when bookmakers disagree on the event outcome, which leads to event odds crossing the EVEN line from one book to the other. Punters use this event pricing disparity to their advantage to not lose cash, regardless of what happens with the event. Since sportsbook disagreements are rare, an opportunity for an arbitration bet occurs only once in a while.
The Sportsbooks’ Opinion Clash in Example
There’s an upcoming match between the Kansas City Chiefs and the Tampa Bay Buccaneers in the middle of the season. To have hedging explained, let’s say that sportsbook Agamemnon pinned the Kansas City Chiefs as underdogs with a +110 on the moneyline. At the same time, sportsbook Busiris decided to select the Tampa Bay Buccaneers as underdogs with the same moneyline value of +110.
If you put a $100 bet on each team at both of these sportsbooks, you’ll get $110 at the end, no matter who wins. Your guaranteed profit from these two $100 bets would be $10 since you’d get $110 from the winning bet and lose $100 on the losing one.
Dangers of Arbitrage Betting
Patience and knowing how to take advantage of sportsbook opportunities can make arbitrage betting very lucrative. Nevertheless, you have to be careful with them. So, what is a hedging strategy for arbitration bets? Betting on opportunities with a 1% to 5% guaranteed return.
If one sportsbook has a $51 bet, while all other sportsbooks have $1.01 bets, the sportsbook reserves the right to cancel the faulty market at any time. Suppose you use the opportunity with the $51 bet and place a large wager. The sportsbook can still cancel the market with an error even after the event’s start, messing up your whole strategy.
We hope that our hedging bets advice has been helpful. Whatever type you choose, it pays off to thoroughly research both the competing teams and the sportsbooks and their odds. Just remember: there is no such thing as a bet you always win as if guaranteed winning bets were a thing; sportsbooks would quickly go out of business.
When should you hedge a bet?
You can hedge a bet with future bets if you’re not sure of the original bet’s outcome, when events unexpectedly change before or during the match, or to cut potential losses. Hedging bets is also beneficial during parlays and when sportsbooks have differing opinions on the same event outcome.
Is it smart to hedge a bet?
Hedging is the perfect strategy to secure sports bets if you’re looking for a safety net when betting. Many casinos and online poker sites have their own versions of hedging, but it’s most commonly used for sports betting.
What is hedging in gambling?
It is a betting strategy to secure winnings and reduce the risks on a specific bet by placing two separate bets on opposing outcomes.
Should you always hedge a parlay?
If the parlay bet has a high risk and reward, a punter should employ hedging as a strategy to minimise the losses incurred from failing one leg of the parlay bet.