Hedging Your Sports Bets: The Best Risk Management Strategy to Guarantee a Profit

Sports betting is just like any other form of gambling. You wager on your favorite team and hope they win. But what if we told you that there was a way to improve your winning chances and, at the very least, limit your losses? 

This is where bet hedging comes in. 

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Hedging a bet means placing another bet to counter your first bet. Therefore, regardless of if your original bet wins or loses, you still win some cash. 

This guide is for you if you are new to this concept and how it works. We would discuss everything you need to know about hedging in sports betting: what it is, how to go about it, and more. 

What Is Hedge in Sports Betting?

Hedging is a popular concept that most sports bettors will have encountered at some point in their journey. It is a kind of risk management that allows you to gain money even if your first wager is unsuccessful. 

To complete a hedge bet, you place a wager that neutralizes the outcome of your first bet. 

Hedging your bets might be frightening at first, but when done correctly, it can assist you in ensuring profits, reducing risk and variance, and providing you with the flexibility to adjust for changes in your forecasts.

Hedge betting is most often a factor of the bettor's taste. Some bettors would rather have a positive payout than risk everything, which is when hedging makes sense. 

There's no reason to hedge if you're committed to your initial gamble and don't mind a potential loss if the other side wins.

Read also: Round Robin Betting Guide

Hedge Definition

A hedge is a betting strategy for lowering risk and ensuring potential profit on a certain wager. It refers to wagering the opposing side of your initial wager if they are uncertain that a bet will win. 

You can also hedge your bet as a backup and ensure you walk away with something even if you feel your bet might win. While the win may not be as large as if you did not hedge it, you can rest easy knowing you have a backup if the initial bet loses. 

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How to Place a Hedge Bet

To hedge your bet on a sportsbook, the steps below can help: 

• First, confirm that you do wish to protect your wager. You are not required to hedge all your bets. You may leave a wager alone if you are confident it will succeed. 
• If you are convinced you want to protect your wager, you must first choose how you will do it. You can choose to simply protect the closest result or all of them. For example, you may ensure a home soccer victory by placing a draw bet (X) / a double probability away victory and draw wager (X2).
• Find a reliable sports betting site such as BetMGM or Caesars for your hedge bet. Not all sportsbooks will allow you to hedge your bets, so ensure you find a perfect site before you begin.
• Pick your preferred wager based on the stake size. Always set stakes that will allow you to at least break even.
• Make your wager.

Examples of Hedge Bets: Best Ways to Hedge Your Bet

It is very easy to hedge a bet. To do this, simply place a wager against your original wager that will guarantee you earn some profit after the bet. You can hedge various bets, including futures, parlays, and individual games. 

Knowing this, let’s begin with a basic example of hedging an individual bet using the upcoming match between Cleveland Browns and Houston Texans on FanDuel. 

Assuming you bet on the Browns to cover their -2.5 spread on Monday for this upcoming match on Saturday. This means the Browns must win the game by 3 points or more for your bet to clear. 

But as Saturday draws near, you start to lose confidence in your bet due to some news about injuries regarding star players in your favored team. 

If you choose to hedge your bet, you can wager on the Houston Texans at +2.5, thus betting against your previous wager and neutralizing it. Because you have hedged the bet by buying both sides of the market, you’ll be sure to reduce your losses.

However, this is not the only way to hedge a bet. There are many options at your disposal, which we'll discuss in the later sections.

Hedging A Futures Bet

Futures bets are one of the most common options when it comes to hedging since they offer long odds. 

So, how does this work? 

Imagine that you wager $200 on the Green Bay Packers to win the Super Bowl at the start of the NFL season. At this point, their odds stand at +2000, which means you get a $2,200 payout if they win. You get lucky, and the Packers make their way into the last teams in the Super Bowl. 

However, you decide to hedge your bet to ensure a profit and wager $300 on the Dallas Cowboys, who have odds of -110 for a chance to win $572.73. 

If everything works out fine, the Packers win, and you get a $2,200 payout. When you subtract your bets of $200 and $300, you are left with a profit of $1,700. But if there is an upset and the Cowboys win, you get a payout of $572.73. 

If you deduct your bets of $500, you are left with only a $72.73 profit, which is better than getting nothing. 

Moreover, aside from ensuring you get a profit, you safeguarded your initial wager and didn't experience a loss either.

Hedging your Parlay Bet 

Unlike other types of bets, hedging a parlay is a little more complex since one single bet can't counteract the other bets. However, you can hedge the parlay in its final leg, thus guaranteeing you get a profit from winning the bet or your hedge. 

For instance, let's presume you have a 4-team moneyline parlay featuring Browns, Kings, Lakers, and Texans as winners. If the Browns, Kings, and Lakers have won their matches already, you can hedge the parlay by betting that the Texans would lose their match against the Cowboys. 

If you wagered $100 on the parlay, you’ll want to wager an amount on the Cowboys that would give you a payout of over $100 on that bet. This will ensure you are covered if the Texans lose to the Cowboys – thus leaving you with some profit.

Live Betting Hedging on Sports Betting Sites 

The introduction of numerous betting sites in the U.S. comes with added betting opportunities, including the chance to bet live on sports. Unlike other forms of betting, live bets allow you to wager on a game after it has begun. If you visit the right sportsbook, you can also hedge pregame bets. 

Hedging a live bet involves plenty of research since you must have placed a wager before the games begin. If your backed team falls behind, hedging may not be a great idea – but still possible. 

However, if your team is progressing fine, you can quickly hedge the bet when the match is ongoing to ensure you get a profit. To hedge a live bet, you'll need to anticipate the potential changes in the odds and how they will affect you later.

Benefits and Drawbacks of Hedging a Wager 

Like all forms of betting, hedge betting has pros and cons. The major benefit that comes with hedge betting, as we mentioned earlier, is that it guarantees you minimize losses and could potentially help you lock in profit. 

No sports bettor goes to bet on a championship game with the aim of losing money, but it would be better to lose less from betting than losing everything – which is what hedging offers. 

Another benefit of hedging bets is that it helps with bankroll management. You can minimize your potential losses from bets and sometimes guarantee a profit. 

But as we mentioned earlier, there are downsides to bet hedging. 

First, it is not easy to guarantee a profit when it comes to betting, which makes bet hedging a tricky strategy. What's more, it can sometimes be difficult to hedge a bet. Not all bets can be hedged, so knowing the risks and potential rewards is critical before you delve into this betting strategy. 

Another downside of bet hedging is the cost. If you have a limited bankroll, allocating funds to hedging your sports bets will be difficult. Moreover, the costs can increase over time if you constantly employ this risk management strategy. If you don't have adequate betting funds, hedging a wager may be wrong for you. 

Generally, hedging your bet is smart, but it comes with risks. 

Hedging Strategy: Best Strategies to Use for Hedge Betting 

Hedge betting can be highly profitable, especially using the right strategy. Below, we have covered some of the best tips that can help in your next hedge bets and substantially boost your profits. 

Pick the Right Markets

You'll find different markets offering hedge betting, but each has benefits and drawbacks. Futures bets remain the best option due to their simplicity and long odds. However, totals, moneyline bets, and spread betting are also great options. Make sure you do proper research before picking an option to be certain of profit. 

Shop for The Best Betting Odds

Understanding the betting odds offered by the sportsbook will significantly impact the profit you get from your hedge bets. We recommend you shop around numerous sports betting sites and settle for the one with the best odds. This way, you'll get the best price and be sure of larger profits when you hedge. 

Don’t Focus on Profit Alone

One of the most important benefits you get when you hedge a bet is the guarantee of profit. While this is critical, it is not the only way to use this sports betting strategy. Hedge betting is also a great way to limit the losses you get from certain wagers you may lose due to an initial wager. 

For instance, let's assume you wager on the Cowboys to win a moneyline bet. Things are going well, but they tie during halftime, and one of their star players suffers an injury. This has given the opposing team an advantage, and the odds have changed. You still have the chance to limit your losses by hedging the bet since the chances of them winning the match have become slimmer. 

Learn more about How to Read Sports Betting Odds

Overview

Every bettor makes different decisions based on their perferences. No player is mandated to follow a specific strategy or action. This is the same with hedge betting. Hedge betting is a personal wagering preference that is quite popular among the more cautious bettors and is a great way to mitigate losses. 

If you are particular about making a profit, hedging your bet is the right choice. However, it is important to remember that hedging is a strategy that comes with its risks.

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FAQs

What does it mean to hedge bets?

Hedge betting is a kind of risk management. It allows you to gain money even if your first wager is unsuccessful. To do so, you place a wager on the opposite side of the first bet's outcome. 

Why should I hedge a bet?

Hedging your bets might be frightening at first, but when done correctly, it can assist you to ensure profits and reduce risk.

When is the right time to hedge a bet?

The right time may differ depending on the market you've wagered on. You need to make your initial bet before the market is live. Once done, you must wait until the betting lines move before you place the second wager and hedge your bet. 

How do I calculate how much to hedge?

As a rule of thumb, you’ll want to hedge an amount that leaves you with some profit even if you lose the original stake. Better still, we recommend using a hedge betting calculator.