How to hedge a sports bet
Sports betting is a really fun activity to some folks; for others, it's their profession. Both parties take risks by placing bets on games that might result in losing money. The occasional bettor will not do as much research as the seasoned sports bettor who has been gambling for years. Nevertheless, both parties would prefer to reduce their losses to a minimum. Now, what if you were presented with an opportunity to lock in a profit on a sports bet? That would be the ideal scenario for many of us, no matter how big or small your bankroll might be.
That's where hedge betting comes in. Each match has a unique outcome, but with a smart technique, you could go around taking the maximum risk and end up with a guaranteed profit regardless of the outcome of the match. To understand this practice in sports betting, you must first understand the principle of hedging.
Let's take the common practice of buying insurance, for example. In the United States, car insurance is mandatory, but the same goes for any type of insurance. The reason we purchase insurance is to offset the economic risk of getting in a car crash and ending up in the hospital. In essence, you are hedging against a great economic loss. This might sound very distant from sports betting, but as a bettor, you can start hedging your bets to protect yourself from losing bets.
How to get started with hedge betting
Over the years, hedge betting has become more and more popular. With all sorts of new types of bets arriving, payouts have gotten bigger and bigger. This has led to bettors seeking ways to secure their profits and/or reduce the risk of ending up with enormous losses. To get started with hedge betting in the first place, you have to consider your sports betting strategy. Do you prefer placing simple moneyline bets? Do you play safe and only bet the favorite, or do you like to go the dangerous route and try your luck with a futures bet on a longshot? If you are a casual bettor who does not take many risks, then hedging your bets might not even be necessary. But, if you are, this is how you get started!
The first step is to go to your sportsbook to start looking around for any potential winners. You might go for a moneyline bet on the underdog with a higher risk, but with great looking odds. You have your eyes on the payout and think about placing a higher stake than usual. You do, and your underdog is up by 10 points at half-time. That's fine, but you will not be wagering for a long time if you do not approach this bet with a proper hedging strategy. To minimize your potential losses, you might choose at half-time to place another moneyline bet on the opposing team (which is currently down by 10 points) on top of your initial bet. If structured correctly, when the game ends, you will have guaranteed yourself a profit.
Hedge betting examples
There are a couple of scenarios where placing a hedge bet would make a lot of sense. In some cases, more than others. For a small moneyline bet or a point spread bet, the risk may not be high enough to start hedging your bet. It's possible, but it would not make much sense, especially when you're placing multiple bets across the board. Now, we'll take two examples where it does make sense to start placing hedge bets.
Hedge betting for futures bets
As a little refreshment, a futures bet is the type of bet that you place for an event in the far future. Not every bookmaker offers the possibility to place futures bets, but most online sportsbooks do. This is an area where sportsbooks have a very big hold (i.e., profit), so it makes sense that bookies offer these bet types. A good example is predicting the winner of the Super Bowl. In a competition like the NFL, where 32 teams challenge each other throughout the season, anticipating the final winner is very hard. You first have to guess the teams that make it to the playoffs, and afterward, the two teams that manage to make it into the big game. To show the power of hedge betting, let's try to forecast the eventual winner for the upcoming season's Super Bowl. This could look something like this:
Original wager: You bet $100 at the beginning of the season on the Detroit Lions to win the Super Bowl. Your odds are +6000 (i.e., 60-1) for this bet as the chance of picking the right team is very small. It does mean that your potential payout is $6,100. Your potential loss is $100.
Hedge: If the team you bet on prior to the season to win the Super Bowl actually qualified for the game, then, to reduce your risk, you could bet a $1,000 wager on the opposing team at the time of the event. Let's assume it's the New York Jets, and the Lions are favored by 6 points, and the moneyline odds are -220/+200. You could wager $1,000 on the Jets to win the Super Bowl at +200. That means your potential loss is $1,000 here, but the potential payout is $2,000.
In the above example, there are two scenarios:
The original bet wins: The Lions win the Super Bowl, and your profit on your futures bet is $6,000 over and above your initial stake of $100. Your hedge bet is a loss, so you lose the stake of $1,000. Your total profit is $5,000.
The hedge bet wins: The Jets win the Super Bowl, and your profit is $2,000 over and above your initial stake of $1,000. Your futures bet on the Lions is a loss at a stake of $100. Your total profit is $1,900.
As you can see, this is a way to hedge a bet to guarantee a profit. No matter what the sport is -- NBA, NHL, MLB or NFL -- if you have a futures bet, you are taking a high risk. Now, you can always choose to let your bet ride for the entire season. But sometimes, you will be presented with an opportunity to hedge your original wager to guarantee yourself a profit. And professionals will often utilize that hedge strategy. One further thing to keep in mind. Sometimes, a proper hedge bet will require you to wager more than your standard bet size to lock in your profit. For example, what if, in the example above, the Jets were a big moneyline favorite, rather than an underdog. What if you needed to bet $5,000 on the Jets to win $2,000. Thus, make sure you are with a sportsbook which accepts large wagers. And no sportsbook accepts as large a wager as BookMaker
. If you want to get down $50,000 on an NFL side, or $20,000 on an NCAA Football game, it’s not a problem. Nor is betting $10,000 on an NBA or MLB game. If you’re a high roller, then join BookMaker
Hedge betting for parlays
Another type of bet where placing a hedge bet makes a lot of sense is the parlay bet. With a parlay, you are betting on multiple games at the same time. You might have heard the term accumulator bet before, which is similar to a parlay bet. Let's say you place a three-team parlay, and you are following the outcome of the games carefully. Your original wager is $100 on the parlay bet on three games with the odds at +600. Two of the three wagers are winners, and you only have one match to go. You could try your luck, or you could hedge your bet to guarantee your profit.
The last match in your parlay can have two different outcomes. Either your parlay is a success and you cash a +600 ticket, or you lose all of your money. To guarantee your profit, you can place a bet on the last match on the opposing team in an amount greater than your stake on the accumulator bet. So, if the odds are -110, then you need to bet more than $110 to guarantee a profit. In this example, let’s say you bet $220 to win $200 on the opposing team. Now, that means there are two possible outcomes:
The original bet wins: Your parlay wins, and your profit is $600. Your hedge bet is a loss, so your total profit is $380.
The hedge bet wins: Your hedge bet wins, and your profit is $200. Your first bet is a loss, so your total profit is $100.
How to use hedge betting in your sports betting strategy
After going through the examples and seeing what the possibilities are, it's time for you to start thinking about your current betting strategy. If you are a sports bettor who enjoys taking great risks, then you might consider hedging your bets now and then. When you are a conservative bettor who does not go beyond a simple moneyline bet, then hedging might not be necessary for you. To answer the question of whether you should or should not hedge a bet, we have some guidelines to get you started:
- Is your original bet a futures bet or a parlay bet? If it is either, then it could mean that there's a lot of risks involved. Thus, a hedge bet might be a smart choice.
- How much are you wagering? Is the stake of your original wager a big part of your bankroll, or would it not hurt that bad if you took a loss? If you think you can't afford to lose this bet, it might be smart to hedge your bet to guarantee a profit.
- Did the circumstances change? Things can happen all the time in sports. For example, you may have bet on a great team to win the Super Bowl, but its quarterback may sustain an injury late in the season. You may realize that your once-promising futures wager is not as great of a bet now. To make sure you do not lose any money, you can use hedge betting to make up for the change in circumstances.
These are just three examples of questions to ask yourself when you are considering a hedge betting strategy. Experienced sports bettors have been hedge betting for years now and will do so in the future. If you want to join those who do sports betting for a living, hedge betting is strongly advised!