You’ve probably heard the cliché phrase “hedge your bets” at least once in your life. But do you know what it means to actually hedge your bets and how to do it? We’ve found that a lot of sports bettors aren’t aware of this concept or don’t understand it well enough to employ it properly.
Hedging your bets can actually be a little scary and intimidating, but when done correctly, it can help you to guarantee profits, lower risk, and variance, and give you flexibility to account for your changes in predictions.
In this guide, we’re going to break down exactly what hedge betting is, what the benefits of hedge betting are, when you should look to employ this tactic, and the strategies and tips that you need to do it properly and profitably. By the end of the guide, you will be confident enough in how to hedge bet that you can start employing it in your personal winning sports betting strategy.
What Is Hedge Betting?
Before we can go any further, we need to make sure that everyone here fully understands what hedge betting is as it pertains to sports betting. Hedge betting, by definition, is a counter wager made against another wager to guarantee profit regardless of the outcome of a game or contest. In other words, a hedge bet is a bet that you make against yourself, but it’s done to guarantee that you make money no matter what happens in a game. If you hedge correctly, you don’t even have to watch a game if you don’t want to because you already know 100% that you’re going to win money.
Some would say that a proper hedge bet is the only sure bet in the entire casino. They’d be correct.
Now, a lot of you might be sitting there somewhat confused right now. How can making a bet against yourself ever guarantee that you’re going to make money? Wouldn’t that doom you to losing? Nope! You see, there are a lot of situations where the odds on a particular bet are going to change. This creates opportunities for you to make a bet on the other side (against yourself) to guarantee yourself profits.
Let’s take a look at an example of a very common hedge bet opportunity to make things clearer.
At the beginning of the NFL season, you placed a bet on the Miami Dolphins to win the Super Bowl. We’ll disregard the fact that we think you’re crazy, but you went ahead and made this bet at 100 to 1. Basically, if you bet $1, you will win $100. You decide to make the bet for $100 meaning that if the Dolphins are miraculously successful and win the Super Bowl, you will win $10,000.
Let’s say that Dan Marino decides in Week 1 to come out of retirement and join the Dolphins. He starts slinging the ball like a champ. The Dolphins crush the regular season and make the playoffs. Their unexpected steamrolling continues through the playoffs, and the Dolphins make it to the Super Bowl against the Dallas Cowboys!
The game looks to be a total toss-up with the odds at (-110) for both teams to win. These are the odds you see when a game is essentially a “pick ‘em” or a 50/50 chance of either team winning.
You are pretty pumped at this point as you are close to potentially making $10,000 as long as the Dolphins with old-man Marino can pull it off against the Cowboys. If the Dolphins win, you make $10,000. If the Cowboys, win, you lose $100. Whoa.
You went from betting $100 on a game to now having $10,100 riding on a single game.
While you can leave this as is and hope the Dolphins pull it off, there is a way for you to lock up some profit. This is where hedging comes into play. Here’s how it would look.
You would bet $5,250 on the Cowboys to win. Yes, you would be betting AGAINST what you want to happen with your original futures bet on the Dolphins. But, let’s take a look at each outcome to show you why this works.
- If the Dolphins win, you will win your original futures bet for $10,000 in profit! But you would lose your hedge bet for $5,250. This means your total profit if the Dolphins win the game is $4,750. Not a bad day at the office.
- If the Cowboys win, you will lose your original futures bet for a loss of $100. But you would win your hedge bet for a profit of roughly $4,772. This would make your total profit if the Cowboys won $4,662. Again, not a bad day at the office.
So, regardless of who wins the game, you are going to walk away with roughly $4700!
This is the beauty of hedging. Yes, you aren’t going to be able to make $10,000, but you are also guaranteeing that you don’t walk away from the game down $100.
This is how hedging your bets works. You limit the top end of what you can make, but by doing so, you are able to lock up some profits no matter the outcome of the game. We’ll take a look at some of the different situation where hedging would be beneficial in a later section of this guide.
The Benefits of Hedge Betting
The above example probably started to give you a little insight into why hedge betting is a beneficial practice. But what are all the benefits of hedge betting? In the sections below, we’ll outline the three biggest perks of hedge betting. Remember, you don’t have to hedge, but amateur and professional sports bettors tend to be big fans and find it quite beneficial. Here’s why.
Guarantee Profit
The above example of the Dolphins and Cowboys Super Bowl should have made this benefit very clear. You can set yourself up to win money no matter the outcome of a game or games. Now, you are going to be giving up the ceiling of how much you can make, but the trade-off for that is that you are guaranteed to be walking away a winner.
Things will need to go right for you to get to that point, but when they do, you can effectively cash out your betting ticket early for a little less profit than if you stuck around the whole time. Typically, you don’t have to wait until the last deciding game if you don’t want to, but the earlier you hedge, the more profit you will give up and the more confusing it will be.
Lower Variance and Risk
Not only does hedge betting guarantee profits, but it also lowers your variance and risk. If you’re the person from our example, you probably don’t make bets for $5,000 or $10,000. $100 might be the biggest bet you’ve made and really close to the top of what you are comfortable wagering. Even though your bet size in our example was only $100, you not have $10,000 riding on one single game. You can pretend that is just a $100 bet, but we all know for all intents and purposes that it’s a much bigger risk.
Winning futures bets and long shots can be challenging. It can be a long time in between wins even if you are picking wagers and teams that have a lot of value. By planning to hedge, you can lower a lot of that variance and risk, and you can lock up wins that are smaller but much more frequent.
Account for Prediction Changes
What happens when what you think is going to happen changes? Well, if you haven’t made a bet yet, you just either elect not to bet or you bet the other side of a game. But what happens when you make a wager and realize later on in the season, or part way through the game, that you’re probably wrong?
This is where hedging can help. You can place a wager in game or later in the season against yourself which may lock you up a profit or it may just minimize your losses. You shouldn’t be hedging that often when you still have a chance to win but would be locking in a loss as that is obviously bad business. But there are going to be times where you want to cut your losses, and you see an opportunity to do that for cheap.
Opportunities to Hedge
Now that you know what hedging your bets is, how to do it, and the benefits of hedging, it’s time to talk about how to locate the opportunities where you may want to consider placing a hedge bet or placing multiple hedge bets. There are three main situations where you can look for hedge opportunities if you want to lock in profits, lower risk, or you need to get out from under a bad pick that you know is going south fast.
Futures Bets
The most common place that you’re ever going to hedge your bets will most likely be with futures bets. Why? Well, typically, futures bets allow you to win a lot of money off of a small investment. If you’re making your futures bets at the beginning of the season, you can pick up some pretty sweet odds regardless of the sport that you are betting on.
At the end of the season or the end of the playoffs, if things go as planned, you are going to be poised to win a lot of money off of your small bet. This means that you may be looking to lock up a chunk of that potential profit. You’ll see in our tips and strategies section below that it’s actually smart to have a hedging plan in place before you make a futures bet if it’s something you might be interested in.
In-Game Hedging
Hedges don’t always have to be on bets that take a long time to wrap up or start out with crazy betting odds. There are actually opportunities to hedge all the time in your day to day betting. It’s typically less common, though, because the amount at risk with each game is probably more in line with what you are comfortable betting. But that doesn’t mean there aren’t instances where you can be hedging to lock up profits, especially when your opinion of how the game will go changes.
But you could also look at the in-game odds and see if you can get a killer price on the other team. You look, and the other team is now +400 to win the game. Even though they were the favorites going in, they are down four runs with only a few innings left and are most likely not going to win the game. This is a great spot to place a wager on the other team and lock up some of your profit.
Let’s say you decide to bet $100 on the other team in-game at +400. Now, you are guaranteed money no matter what happens. If the initial underdog team you bet on wins, you get $360 in profit minus the $100 you wagered in-game on the other team for a total profit of $260.
So, regardless of who wins, you’re either getting $260 or $300 in profit. You obviously will not have these blatant of opportunities in every game, and there will be times that you just want to let things ride, but these opportunities do exist, and you should be looking for them if you like guaranteed money instead of taking a risk, especially on a big underdog pick.
Hedging Parlay Bets
Another betting instance where you can bet a small amount of money to win a lot are parlays. A parlay, for those of you that are new to all of this, is a combination of individual bets all rolled into one super bet. Basically, to win your parlay, you need to win every single bet on that parlay. A parlay can be two or more bets, but you have to win every single bet to win. Because this is tougher to do, you will be rewarded well for it.
Let’s look at an example where a hedge bet might help you lock up some money. Let’s say you did a $100 six-team parlay bet. Six-team parlay means you have to win six games you picked to win your parlay.
The profit for a $100 six-team parlay (all bets at -110) would be about $4,741!
Let’s say that you’ve won your first five games and the sixth and final game is about to start.
You could always ride out your parlay, and if your team wins the sixth game you will win $4,741, but if they lost you would get no profit and actually be down $100. What you could do is bet $2500 on the other team going into the last game. This way, you would lock up a profit regardless of who wins thanks to your hedge.
- If your original pick wins, you will win $4,741 on your hedge bet, but lose $2,500 on your individual bet. You’d walk away with a profit of $2,241.
- If your original pick loses, though, you will end up losing $100 on your parlay bet, but you’d win $2,273 in profit on your individual bet. This would leave you with a profit of $2,173.
So, no matter what happens, you are walking away a winner. Some people would argue you’re just better off making that a five-team parlay which is technically true. But there are times that you get that close to the money that you really just want to make sure you walk away with something. It’s all a matter of personal preference, but do know that parlays are a common area where hedges are made.
One instance where it makes strategic sense is if something changes with the last game to change your prediction.
Hedge Betting Strategies and Tips
The last thing we really want to cover today are the tips, strategies, and tricks you need to know to make sure that hedge betting is not only profitable for you but that it doesn’t cost you a lot of money. It’s not incredibly hard to do as long as you know the basics and make sure that you cover all of your bases.
Take some time and read through the tips and strategies we have for you below. We highly recommend adopting all of the practices recommended here as they are all important to your success hedging your bets.
Quadruple Check Your Math and Win Requirements
If you’re someone who typically bets smaller amounts, some of the recommended bet sizes in this guide probably made your head spin.
You need to quadruple check your math to make sure you are making the right sized bet to get the result that you are looking for. A mistake in your math could put you at risk to lose a lot of money if it’s a big enough mistake.
This isn’t as big of a deal if you are only hedging on one game, but if you decide to hedge earlier in the process where you have to bet on multiple games, your math needs to be perfect. The best advice is to quadruple check your math, then have someone else take a look at it as well. Make sure things are right before you go firing off huge bets that are way outside of your comfort zone.
Additionally, you want to quadruple check that you have correctly understood the terms of your initial bet. You want to make sure that you bet on exactly what you thought you bet on and there are no contingencies where the bet would not pay out. There shouldn’t be anything that is hidden here, but make sure you read all the small print before firing off a big hedge bet.
If you aren’t sure and want to make sure, ask the sportsbook you made the initial bet with. Ask them for anything and everything you need to know about that bet.
Make sure it is paying out the way that you interpret before you make your hedge bet. You will want to do the same thing with your hedge to ensure that you have made a proper wager.
We’re not trying to scare you here or make it seem like hedge betting is that hard, but we want you to be aware of the risks. As long as you check everything and your math and understanding of the bets is correct, then you’re good to go. You’ll still probably get nervous making such a big bet, but it will feel really nice when you win your guaranteed money.
Be Financially Prepared to Hedge
If you’re someone who bets $10 or $20 or even $100 a game, do you have $5,000 sitting around that you can use to make a hedge bet? We’re going to guess that some of you do, but some of you probably do not. Hedging requires capital to make it happen. You can’t just tell the sportsbook that you’re going to hedge one of your bets and get them to just do it on credit for you. You need the cash in hand to make the bet.
It would be nice if they let you do that, but it’s just not the case. This means that you need to prepare ahead of time to ensure that you have the money you need to make your hedge bets. If you’re betting in person, you need to make sure that you have the cash withdrawn from your account. If you have ATM limits, you may need to go into the bank. If the money is in a different account and needs to be moved, you may need to do that a few days ahead of time. If you’re betting online, you may need to ensure a day to process your deposit to ensure there are no hiccups.
We’re not going to give you financial advice about how to get the money if you don’t have it, but at least know that it will be necessary if things go your way. It’s a good problem to have because it means you are guaranteed to win some money, but you will need capital to execute the bet. If you can’t find the money, you can always hedge for a smaller amount and at least lock something up.
Create a Plan in Advance
There are probably a lot of you here right now that are scrambling last-minute to try and place a hedge bet in to lock up some sort of profit. If that’s you, we hope you get things worked out and there probably still is time to at least lock up some of the profit.
But, for everyone else, take that as a learning lesson. The best thing you can do when it comes to hedging your bets is have a plan in place in case you need it. Even if you aren’t sure if you are going to hedge or you’re not given the opportunity, at least know how you will execute if you need to.
Have a plan in place. It does not have to be specifics, but at least know roughly what you would bet, what you would need to bet it on, and how you are going to get the money online or into your hands to make the bet. If you don’t end up needing the hedge or choosing to use it, no big deal.
You Don’t Have to Hedge or Hedge to Even
You are never obligated to hedge or obligated to hedge to an even amount. Hedging is something that is a personal preference. Some bettors are going to want to ride out all of their bets the whole way to prevent giving up extra juice to the sportsbook. Others are going to like the guarantees and lower risk that come with hedging.
Is hedging or not hedging more correct? Nope. It is literally all a matter of personal preference.
Additionally, you do not always have to hedge to even where you have nothing riding on the game. Instead of locking up 50% of the profits and taking out all of the risk, you could lock up a smaller percentage of profits with a smaller hedge bet and then let the rest ride on as a bet. Here’s what that hedge betting strategy looks like.
Let’s take our Dolphins and Cowboys example from earlier. You’ve got a $100 bet on the Dolphins to win the Super Bowl at 100 to 1. The Dolphins have made it to the Super Bowl, and you stand to win $10,000 if the Dolphins win. In our above example, we told you to hedge just over $5,000 to lock up a guaranteed profit with no risk on the game.
But what happens if you still think the Dolphins are going to go all the way and you want some action on the game? Instead, you could hedge something like $2,000. If the Dolphins lose, you’ll profit around $1,900. But, if the Dolphins win, you’ll get a profit of about $8,000. It’s completely up to you how much you want to hedge.
Ask for Help If You Need It
Seriously, if you do not understand something when it comes to hedge betting, don’t just fire off big bets and hope you get it right. We can’t think of any nice words to describe how silly and wrong that is. Take the time to read through this guide and fully understand how things work before you start making hedge bets. You can end up losing a lot of money if you do something incorrectly.
If after reading through this guide you still don’t know how something works or you have a unique situation you aren’t sure about, ask someone for help. Post about it on our website or ask your smartest sports betting friend. Heck, you can even ask one of the agents at the local sportsbook for help. Make sure you throw them a few bucks, though, if they take the time to break things down for you.
The Wrap Up
Hedge betting is not something that you have to do, but it is something that sports bettors of all skill levels tend to favor doing. It can lock up profits, lower risk, and help you get out from under situations where things surrounding your predictions have changed. Just make sure that you are fully up to speed on what you are doing and you’re not making any major blunders that could get expensive. Outside of that, enjoy the awesomeness of hedge betting!
