Hedging your bets. Find value hedging in sports betting

Done properly, hedging can be used to guarantee profits from certain bets and build your bankroll.

Rodgers throwing
Oct 6, 2019; Arlington, TX, USA; Green Bay Packers quarterback Aaron Rodgers (12) looks to pass in the second quarter against the Dallas Cowboys at AT&T Stadium. Mandatory Credit: Tim Heitman-USA TODAY Sports

Hedge betting generally refers to a bettor placing a bet on the opposite side of the outcome of their initial wager on a specific event. Hedging bets is a risk-averse way of exposing yourself to the high variance nature of sports betting and the different outcomes that can occur. It also can be used in a way to guarantee profits from certain bets and will allow you to build your bankroll when done properly. In this article, we’ll go over the different types of hedge bets you can place, and some scenarios worth keeping an eye out for in the betting markets. 

It’s important to remember when hedging that the odds the sportsbooks offer on certain outcomes will dictate your ability to hedge your original bets. You should place more value on this factor than what you think the actual outcome of an event will be, if you are looking to hedge. If you’re inclined to ride out the original bet, your focus should be on what you think the outcome of that bet will be.

When and why should you hedge?

Before getting into the strategy of how to hedge bet, I think it is important to first discuss the different types of hedge bets you can place, and why you may want to place them. 

  • Hedging for guaranteed profits – This type of hedge bet is placed when the odds of your initial bet have increased substantially in your favor, but you still have a feeling the initial bet could lose. When this scenario arises, the odds of the opposite side of your initial bet swing much higher in your favor. This allows you to risk less money on your hedge bet and receive a higher payout than you wager. Usually your hedge bet amount will be placed to win more money than your original bet amount. This allows you to cover your original wagered amount at bare minimum. The hedge bet won’t cost you nearly as much at this point in time, as the odds are much worse now than when the event started. With this method, regardless of which outcome wins, you walk away a “winner”. Remember: you don’t have to place a hedge bet. You can always let your original bet ride if you are confident in the outcome, especially after an event starts and appears to be going in your favor.
  • Hedging due to changes in an event – Did a star player get ruled out? Did the weather forecast for an outdoor game drastically change late in the week? Whatever the reason may be, if there are significant enough factors that change your outlook on an event outcome, it could be worth placing a hedge on your original bet. In this example, you could either bet the other side for more money – effectively erasing the original bet – or you can place your hedge bet as close to identical to your original bet as possible, to minimize losses and try to break even overall. 
  • Hedging in play/live in-game – This type of hedge bet goes hand in hand with the guaranteed profit hedge bet. As an event progresses in real time, the probability of the two possible outcomes occurring changes. If the odds of your initial bet winning become significantly better, then placing a bet on the opposite side during an event will guarantee profits. Another reason to place an in-game hedge bet could be due to a superstar on the team of your original bet getting hurt in the middle of the game. The timing of this injury would affect the outcome of the game, and you very likely would not have wagered on that team originally if you had known their star player would be out. This strategy allows you to either lock in profits or mitigate losses in the middle of a game. Note: Remember to always shop for the most favorable odds. If an event is at a stoppage point – say halftime of a football game – sometimes the odds are different for the 2nd half lines when compared to the live game lines, but these are essentially the same exact bet. 
  • Hedging to mitigate potential losses – As mentioned with the in-game bet, sometimes hedge betting to mitigate your potential losses is a good strategy when the probability of your original wager cashing is less likely than when the event started. Instead of letting it ride – to a probable loss – you can bet the other side to mitigate your losses.
  • Hedging futures bets – This is one of the more important types of hedge bets, because this is where serious money can be guaranteed. As mentioned in our intro to prop betting article, some main props you can bet are the division winner, conference winner and championship winner in the playoffs for each sport. Each of these future bets are usually going to pay out at very favorable odds. For example – in the NFL – if the team you wagered on to win the Super Bowl makes it to the Super Bowl, you have an opportunity to hedge the futures bet before the game starts (see how to calculate a hedge bet below). 
  • Hedging parlay bets – This is very similar to the hedge betting discussed when wagering on futures. In a parlay bet, you need all elements to be correctly wagered on for the parlay to cash. As you add an event to a parlay, the odds of the parlay hitting and cashing are less likely. Each piece of a parlay is called a leg. As you approach the final leg of a parlay, you have the same hedge opportunity described in the futures scenario. The key to being able to hedge on a parlay bet is correctly wagering on your first bets within the parlay. If your parlay is 7 legs, and you have correctly wagered on the first six bets with one event left, you have an opportunity to hedge the final leg of the parlay in order guarantee profits. For the risk takers out there, you’re more than welcome to let it ride!
Feb 17, 2020; Las Vegas, Nevada, USA; Washington Capitals left wing Carl Hagelin (62) is tripped by Vegas Golden Knights defenseman Jon Merrill (15) during the third period at T-Mobile Arena. Mandatory Credit: Stephen R. Sylvanie-USA TODAY Sports

What is arbitrage betting?

One of the less common types of hedge bets you will hear about is arbitrage betting. This is a crucial betting strategy when the opportunity presents itself, it just doesn’t happen very often. Generally, bookmakers use similar data to create their opening odds for an event. This causes most sportsbooks to offer similar odds for the same event, but they’re usually not exactly the same. Also, most of the time, the sportsbooks will have the same favorites and underdogs in a certain matchup, along with a similar spread.

However, when two bookmakers assess the outcome of an event differently and the odds for that event cross the EVEN line from one book to another, an arbitrage betting opportunity presents itself. Crossing the EVEN line means one team is favored at one sportsbook, while the opposing team is favored at another sportsbook.

Arbitrage betting is when bookmakers’ differing opinions on an event’s outcome allow a bettor to place a bet on each side of the two possible outcomes at two different sportsbooks, meaning the bettor will make a profit regardless of the outcome.

Let’s use an NFL example and say the Patriots are facing the Bills in a divisional matchup in the middle of the season. One sportsbook may have the Patriots as +110 underdogs on the moneyline, while another sportsbook may have the Bills as +110 underdogs on the moneyline. This means you could risk $100 on both bets and win $110 on whichever bet wins. Therefore, on a $100 wager, you would net $10 of profit, no matter the outcome of the game, because one of the two bets would win you $110 while the other bet would lose you $100. This is very important to keep an eye out for because it is guaranteed profit.

How to calculate a hedge bet

Calculating a hedge bet, or assessing whether you want to hedge at all, comes down to personal goals. To some people, a couple thousand dollars is pocket change, while to others that could be a rather large payday. No two bettors should hedge the exact same way. When deciding whether to hedge or not, you should personally assess whether you want to take a risk and let your original bet ride for a larger amount of money, or lock in guaranteed profits at a lower amount while eliminating all risk from the equation. This all plays into your overall strategy of bankroll management.

Let’s use the Super Bowl futures for an example on how to calculate potential profit in a hedge bet. In this hypothetical, you placed a bet on the Cleveland Browns to win the Super Bowl at +4000, and they have just won the AFC Championship game, punching their ticket to the Super Bowl. Now you’re in a situation where you ride out your original bet and hope the Browns win the Super Bowl so your +4000 bet cashes, or you place a hedge bet on the opposing team to win before the game begins. The trick here is to bet however much money you would be okay with taking away from the cashing out of your Browns ticket. To take this example a step further, let’s say you put $100 on the Browns at +4000, so your payout would be $4,000. If you hedged the opposing team’s moneyline in a second wager for $2,000 at EVEN money, your potential outcomes would now look like this:

  • Browns win – you win $4,000 from your Browns ticket, and lose $2,000 from your hedge bet for a profit of $2,000.
  • Opposing team wins – you win $2,000 from your hedge bet and lose $100 from your Browns futures bet for a profit of $1,900.

Either way, you make a guaranteed profit!

Again – in this scenario – to some bettors, the difference between losing $100 and winning $4,000 may not be that big of a deal. They would simply let the original bet ride in hopes of cashing the $4,000 if they feel there is a decent chance of a Browns victory. On the other hand, a bettor who has a smaller bankroll and would gladly take a guaranteed $2,000 – as opposed to worrying about losing outright – would be smart to hedge bet. The decision of whether or not to hedge isn’t a one-size-fits-all approach. It’s a personal assessment of the potential winnings and losses.