Most sports bettors have a vague idea on how to hedge bets. The average bettor knows that this involves wagering on multiple outcomes.
Of course, having a vague notion of hedge betting and successfully using this strategy are two different things.
It’s all too easy to hedge wagers and lose value to sportsbooks. Therefore, it’s important to know the different facets of hedging bets and look for right opportunities.
I’m going to cover what bet hedging is, along with the proper times to use this strategy. I’ll also discuss when you should avoid hedging bets and how this concept is commonly confused with arbitrage betting.
Hedge betting involves wagering on an opposite outcome from your original wager. This can either be used to increase your profit potential or act as insurance when trying to eliminate risk.
This only explains the core concept of hedging. You must also account for how much money you want to wager on Buffalo.
Here are the 3 ways in which you can do this:
Experienced bettors don’t bet wildly different on the hedge. Instead, they’ll take a small guaranteed loss on a bad original bet or book a small profit on a more attractive hedge wager.
Sportsbooks don’t let you take bets back once they’re confirmed. Therefore, hedging bets is a smart strategy under certain circumstances.
Just be aware that when you hedge equally on both sides, you’re guaranteed a small loss with the 10% vigorish (a.k.a. juice). But again, this is an acceptable outcome when you have a bad feeling about the first bet.
Sometimes we make a poor sports wager, only to realize it after the fact. Here are situations where you may make a bad bet and want to rectify it:
Some of these scenarios would be your fault, while others aren’t. But they all represent situations where you can hedge to minimize losses.
I don’t recommend that you hedge on a regular basis, especially if you’re a new bettor. Instead, it’s best to gain experience and feel out the times when it’s best to hedge.
Hedging wagers isn’t all about minimizing losses on bad decisions. Instead, this strategy can guarantee a profit in certain situations.
Here are a few scenarios where hedging can either guarantee profits or bring you greater winnings.
Sports betting futures are attractive because they give you the chance to bet small to win a big profit. They also present one of the best opportunities to hedge wagers.
Here’s an example:
Professional sports bettors won’t hedge in this instance because the Rams are already favored. And it would offer negative expected value (-EV) to bet on the underdog opponent.
But if you’re a recreational bettor who’s never won $5,000 in your life, then you should consider hedging. You’ll collect a significant amount of money either way and build your bankroll.
It seems contradictory to think that you can have a bet on each side that offers positive expected value (+EV). But this can arise in certain instances.
Here’s one example of when both the original and hedge bets can offer +EV:
Odds are that you’re going to win the first wager based on the way things are going. And your handicapping skills suggest that another +EV is available in the second half.
Even if you lose this bet, you’ll at least hedge if your original wager comes through as expected. But the upside is that you win two bets, making a hedge worth the risk when considering the second +EV wager on the table.
Middle wagers are common in NFL spread betting, where you can easily judge line movement throughout the week. A good middling strategy is to buy into a line early and hedge on the other side after movement.
Hedging in this case makes sense because it gives me two opportunities to win. I need the Eagles to win by 3 points, which covers both their current line (-2.5) and the original Cowboys line (+3.5).
NFL teams win by 3 points 15.4% of the time, which is the league’s most common win margin. But even if this doesn’t happen, I only lose the 10% juice on my losing wager.
Here’s the math on why hedging with middle bets is profitable in this situation:
The math shows that middling $220 total in this scenario pays a $22.34 average profit.
Unfortunately, situations like this don’t arise every day in sports betting. But if you can get in early on good line movement – especially those involving common win margins – then you can make nice profits.
Matched betting involves hedging wagers to take advantage of a free online sports bet. You take equal action on both sides of a line so that you’re guaranteed a profit with the free wager.
Here are the steps to using matched betting:
Bookmakers normally require you to deposit and bet your own money to qualify for the free wager. Some sportsbooks also make you rollover the free bet value before cashing out winnings.
You may have to rollover a higher value. But this shouldn’t be a problem if you plan on making consistent sports bets anyways.
Hedge betting obviously doesn’t work every time, or else everybody would be a winner. The average bettor who doesn’t understand hedge wagering puts themselves into a lot of -EV situations.
The key to being a successful hedge bettor is identifying these situations and avoiding them. Here are the times where hedging wagers isn’t good idea.
The worst thing that you can do is make a -EV bet, then hedge it with another -EV wager. This is an online sportsbook’s dream because you’re throwing down dumb money on top of dumb money and guaranteeing them vigorish.
This situation often arises when you make a -EV bet before the game, then place a bad live wager after the game starts.
Novice bettors often think that they’re hedging in this situation, simply because they’re betting on the other side in the second half. But the truth is that they’re exposing themselves to more risk if they don’t have the skills to determine whether this is a +EV bet.
Parlay bets are popular because you can win such a large payout. Given the size of the payout involved with large parleys, some players wonder if they should hedge near the end to guarantee winnings.
This seems like a smart move because you guarantee yourself a big win no matter what. But the problem is that you can reduce your expected value.
The key thing to understand is that a parlay bet is simply staking your original bet over and over. Here’s an explanation using the same parlay above with 10% juice:
Winning these six bets delivers a payout worth 47.41 to 1. The sheer size of the payout makes it seem like you can afford to hedge on the final game just to guarantee a big profit.
But let’s say you hedge with the exact amount that you stand to risk in the sixth game:
This looks equal on the surface. But look at your total amount after the fifth win ($2,535.91) in the parlay versus what you’d win with the single-game bet ($2,305.37).
By hedging on the opponent in the sixth game, you’re surrendering $200.64 in value (2,535.91 – 2,305.37). You’re better off sticking with a 5-team parlay without the hedge on game 6.
Hedging the final game of a parlay isn’t always a bad idea, depending upon what odds you’re getting.
But in the case of 47.41 to 1 on a 6-team parlay – which is more reasonable than the 45-to-1 payouts that some sportsbooks offer – you lose value when hedging the last contest.
Hedge wagering and arbitrage betting are two strategies that can easily be confused.
Arbitrage betting is when you wager on different outcomes based on an odds discrepancy between sportsbooks. This strategy only works when the discrepancy offers a profitable opportunity.
Hedge betting is when you wager on different outcomes in relation to the original bet. This strategy is about reacting to any change in the original circumstance and betting to either minimize risk or guarantee a profit.
Arbitrage betting requires you to wager on all possible outcomes of a contest. A soccer match would call on you to bet on both teams winning along with a tie.
You obviously can’t make all these wagers at a single sportsbook – otherwise, you’d lose based on the juice. Instead, you need to look across multiple sportsbooks to find odds that combine to create a profitable situation.
Here are sample odds from a single sportsbook:
You may like the draw odds here, but want better odds on AC Milan and Intern Milan winning. And if you can find better deals at other sportsbooks, then you can combine these wagers to earn profits.
In summary, the key difference is that arbitrage involves looking for good odds to cover each outcome. You don’t, however, base your strategy on the original wager.
Hedge betting differs because you base your subsequent wager(s) on the first bet.
Hedge betting is more complicated than simply betting on both sides of an outcome. Instead, you need to pay attention to the situation at hand and decide whether there’s a profitable hedging opportunity.
Good times to hedge wagers include when you’re near a successful futures bet, find a good second hedge with +EV, middling, or matched betting.
The worst time for hedge betting is when you’re making a second -EV bet or hedging against favorable parlay odds.
These are rough guidelines that you can work from when trying to spot profitable hedge bets. But there aren’t any one-size-fits-all indicators with this strategy.
You can use what I’ve discussed here as a base. But experience will help you take things further and consistently spot good hedging opportunities.
Combining good hedge betting and skilled handicapping is an excellent way to make long-term sports betting profits.
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