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Some people do it to cut their losses or minimize their risk. Others do it to ensure a profit. No matter the reason why you would choose to do it, knowing how and why to hedge a bet can prove to be lucrative.
In this article, we discuss what hedging a bet means as well as specific examples of when it makes sense to do so.
What is Hedging a Bet?
Hedging a bet is a strategy that involves placing bets subsequent to an original wager. In almost all cases, a “hedge” is in direct opposition to one’s original wager.
Hedging can be done in a multitude of ways and by implementing different strategies, but the idea is always the same. One way is by opposing your original wager that seems destined to win. Why hedging is smart in this sense is to ensure a profit in the off chance that the outcome in your original wager does not come to fruition.
The other reason for hedging would be the opposite idea, taking the other side of your original wager if that wager seems destined to lose. In this case, instead of ensuring a profit, one would be minimizing their losses.
When Does Hedging Make Sense?
By now you know the reasons why people hedge, but here are some specific scenarios that describe the process in more detail.
A popular means for hedging bets is through futures odds. In most sports, one can place a futures bet on a team or a player to win their respective championship. Here is a hypothetical example of hedging a bet using current odds to win the 2020-21 Super Bowl (odds courtesy of FanDuel).
Suppose a bettor placed a $100 wager on the Dallas Cowboys at +1700 odds to win it all at the start of the season. If the Cowboys went on to make the playoffs, their odds to win the Super Bowl would likely be shorter than +1000, depending on their playoff seeding and their draw.
In this example, a bettor would stand to profit $1700 from their original wager if they “let it ride” and the Cowboys won the championship. Some bettors looking to hedge will take a game-by-game approach, betting the Cowboys’ opponent on the moneyline. With this approach, hedging in order to ensure a profit only makes sense if the bettor wagers enough to profit more than $100. Otherwise, there is a chance the bettor could still lose money if the Cowboys won that round but ultimately did not win the championship.
There is no exact science as to when is the best time to hedge. Some bettors in this situation would choose to “roll the dice” until the NFC Championship game and decide then to oppose the Cowboys. Other bettors might choose to wait to hedge their bet until the Super Bowl, betting on whatever AFC opponent the Cowboys would face.
Hedging too early, perhaps starting with the Wild Card or Divisional Round will eat into your potential profits. However, for every game you did not hedge, you would run the risk of losing your initial wager altogether and walking away with nothing.
Live In-Play Bets
Live in-game betting provides great opportunities to hedge bets. Suppose you make a bet against the spread on a favorite who is covering easily early on. Perhaps it would be wise to make a live bet on the underdog who is getting way more points than they were at the beginning of the game. This kind of play hedges against a possible comeback or a “backdoor cover” which means a team who is not covering scores late to get within the original spread.
Another example of a live bet hedge is betting on the halftime line. At that point, bettors have seen enough of the gameplay out to make a decent determination of how the rest will play out. Either way, live betting lines are continuously updated so there are plenty of opportunities to hedge and get a number that protects your original wager.
If you are an experienced bettor, you likely have had the final leg of a parlay lose and negate all your successful early bets. If you are one who routinely bets parlays, you should definitely learn the practice of hedging.
Suppose you placed a five-team parlay and the first four legs have already cashed. You are likely staring at a payout of 20:1 odds or better. Instead of risking the loss of your initial wager, that would be a perfect opportunity to oppose the fifth bet of yours, so as to ensure at least some profit.
Hedging parlays becomes tricky if all your games start around the same time. If all the legs of your parlay are happening simultaneously, you will likely have to resort to live betting for any sort of hedging opportunities.
A Change of Heart
What if you made a bet early in the week, only to learn one of your team’s star players will miss the game with an injury? Perhaps the news is so severe that you no longer think you have the right side. Other times, bettors just have a bad feeling or a change of heart about a bet before it begins.
Hedging is certainly a viable option even before a game begins. Since sportsbooks take a “vig” or “juice” out of each bet, you are likely to face a small loss if you oppose your original wager. However, many bettors would feel that it is a better option than losing their initial wager altogether.