HEDGING DEFINITION

What is Hedging?

In betting, hedging means betting either pre-game, in-game or during a long-term event on the opposite side of the initial bet in order to try and lock up profits regardless of the outcome. Hedging can also be used to prevent a greater loss if a bettor is uncomfortable with their betting position.

A hedging bet (also known as a hedge) is a strategy that sports bettors can use to turn their bets into guaranteed profits if the odds have shifted in their favor. Under different circumstances a hedge bet can also be placed to limit your losses if odds have moved out of your favor. A hedge bet is most commonly used in futures markets but can also be done in both pre-game and in-game (live) markets. A bet on the futures market is a long-term bet on an event that will happen sometime in the future, some examples of futures markets are betting on the winner of March Madness or the World Series, but they can also be related to players such as betting on the NFL MVP or the Defensive Player of the Year in the NBA.

Hedge Bet for Guarantee Profit

Example let's say you placed a $100 bet on the Golden State Warriors to win the NBA Championship at the start of the season at +900 odds . You stand to win $1000 if the Golden State Warriors win the championship. Now they have made it to the NBA Finals and are coming up against the Brooklyn Nets. The Warriors go into the series as slight favorites with the Nets paying +150 to win the Championship. Here you have the opportunity to hedge your original bet on the Warriors:

If you decided against placing a Hedge Bet:

In the above example you can see why hedging is a popular strategy among sports bettors as it locks in profit for bets with uncertain outcomes. Although you make more of a profit without placing a hedge bet, it isn’t entirely risk free. In these situations it's up to the bettor if they believe in their original bet or if they want to play it safe and place a hedge bet for guaranteed profit.

Hedge Betting Strategies

There are different strategies you can apply to hedge bet scenarios. The previous example is known as unbiased hedge bet, where you stand to make the same amount of profit no matter the outcome. If you were biased towards a particular outcome (e.g. strongly believe the Nets or the Warriors will win the series) you can tailor your hedge bets to suit that outcome. You can use our Hedge Calculator to automatically calculate how much you should wager on your hedge bet depending on what strategy you want to use.