If you think winning a 10-team parlay is a dream come true for most bettors, you would be spot on. However, the chances of that happening are slim to none, making it not a very realistic goal for serious bettors to reach. The dream scenario for most bettors is to find themselves in a position where they are guaranteed a profit regardless of what actually happens in a game they bet on. When a bettor has a chance to 'hedge' their bets and turn a profit, they can consider the time spent handicapping well worth the investment.

What Does It Mean to Hedge a Bet?

When you hear someone use the phrase 'hedging a bet,' they are referring one of two definitions. The first is a situation where a bettor would cover their tracks and place a wager on the opposite team in order to limit how exposed they are in a particular game. Let's jump right into an example to help explain.

Let's say you decide to bet the NBA's Bucks at -140 on the moneyline but during pre-game warmups, Giannis Antetokounmpo suffers an ankle injury and is no longer able to play. Instead of letting your original bet play out and test your luck with the likes of the Bucks' supporting cast, you would bet on their opponent, the Raptors, at +130 for the same amount as your original bet. So now you're left with a win-win situation, in which the only risk you have is the vig on your bet .

You bet 100 to win 1,000 on a 4 team parlay, the first 3 win, and you decide to hedge the last game. The last game is Miami vs Philly and the line is the same as when you bet it, Philly is -3. To hedge a piece of land was to limit it in terms of size and that this gave rise to the 'secure, limited risk' meaning. Hedge funds, much in the news nowadays, take their name from their method of limiting, that is, hedging, their risk. What is Hedge Betting? First of all, hedge betting is not the same as arbitrage betting, which should be researched in a different article, although there are similarities. Arbitrage betting can occur when there is a discrepancy between the odds that two different bookmakers offer. This is different. Hedge betting is a sports betting strategy that most bettors are at least vaguely aware of. This doesn’t mean that they all fully understand how to use it effectively or that they know why and when they should consider hedging a bet. As a result, the strategy is often used incorrectly or for the wrong reasons. Hedge: A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures.

Why Would a Bettor Hedge a Bet?

When you make a bet of any kind, you are exposed. You are exposed to the potential loss of the amount that you have wagered on one or multiple games. But this is what gambling is - it's exposing your bankroll in order to see a return on your investment. However, situations do arise where a bettor is no longer comfortable with how exposed they are on a certain game. Something about the game has changed - perhaps the weather has worsened, or maybe a key player has been injured in the pregame warmup. Maybe you bet early and since placing your bet the coach has been fired or there has been a suspension handed out or there were travel issues. Whatever the case may be, a bettor will hedge their bet in order to limit the damage to their bankroll should things go sour between the time they place the bet and the time the game actually starts. This is damage control.

The second definition of 'hedging' is a situation where a bettor can guarantee themselves a profit. This is done almost exclusively when a bettor has a solid future bet in place that has the potential to win. Let's say, for example, you bet $100 on the Los Angeles Dodgers to win the World Series at 12/1 before the season started. If the Dodgers make the World Series, you have two options. You could let your $100 bet ride and stand to win $1200 or you can bet on their opponent, the Red Sox, at +150 to win the Series. Let's say you bet $600 on the Red Sox and if they win, you would win $900 and lose the original $100 you bet on the Dodgers for a profit of $800. If the Dodgers were to pull off the victory, you would lose that $600 bet on the Sox, but make $1200, for a profit of $600. This is a perfect scenario where you can ensure yourself a small profit rather than nothing at all.

Advantages and Disadvantages of Hedging

Both the advantages and disadvantages of hedging your bet is really straight-forward. The main advantage of this strategy is that it offers the bettor a great deal of flexibility in managing the level of risk you are exposed to. If you are extremely close to landing a big payout via parlay, hedging affords you the opportunity to play it safe and ensure a profit is guaranteed. Furthermore, if you stand to make a loss on a wager and no longer want that exposure, you can hedge and reduce the number of units that will be lost.

The disadvantages of hedging are kind of hidden in the fact that just because you have the ability to reduce a potential loss, you are still guaranteed to take that loss. Just because you hedge and take a small win, you are still sacrificing the potential profit from the original wager. Using hedging to guarantee profits also has an associated cost as you are effectively paying a premium from your potential profits to cover the other side of your wagers.

How to Hedge a Parlay Bet

If you are a parlay player, there is a scenario where 'hedging' could be used to lock in a profit at the tail end of a parlay. Let's say you bet a five-team parlay and the first four games have won. Instead of sweating out that final west-coast game between the A's and Mariners, you could simply make a bet on the other team in the final game of your parlay. By making an aggressive enough bet, you could make it so that your winnings would be the same regardless of the actual result. If the payout of your original parlay isn't large enough to consider 'hedging your bet', then you have to wonder if this kind of bet is a bet you should have made in the first place, given what we know about true odds.

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A hedge is a method to reduce risk and secure winnings for a specified bet. In sports, it means betting the opposite side of your original wager in order to either try to middle the game, or to reduce the downside exposure of the original wager.

The most popular instance of hedging is for a futures bet. For example, you bet the San Francisco 49ers at +2500 to win the Super Bowl ahead of the season and they eventually make it. Instead of riding out the +2500 and hoping the 49ers win, you could hedge that bet and take the opposing team, the Kansas City Chiefs, to win on the moneyline.

While you'll get more money if you ride out the original bet, there's also more of a chance you'll come out with nothing. If you hedge and bet the Chiefs, you'll win something no matter the result of the game.

Hedge Your Bet Meaning

Below is a breakdown of payouts in a possible hedge:

Original wager: $100 on 49ers at +2500 for a $2,600 payout ($2,500 profit)
Hedge: $1,000 on Chiefs ML -150 for a $1,667 payout ($667 profit)

With Hedge
49ers win: $2,600 payout - $1,000 bet - $100 bet = $1,500 profit
Chiefs win: $1,667 payout - $1,000 bet - $100 bet = $567 profit

Without Hedge
49ers win: $2,500 profit
Chiefs win without hedge: down $100

Hedge A Bet Meaning

As seen with a hedge, the bettor comes out in the positive no matter how the game goes. Without the hedge, the bettor wins a bit more after a 49ers win but also comes out negative if the Chiefs win as a favorite.

Should you hedge a bet?

Hedging a wager comes down to personal preference. Some people are fine with a positive payout and prefer not to risk everything, which is when a hedge makes sense. As for those who are keen on their original wager and are fine with losing money if the other side wins, there's no reason to hedge.

More hedging

Hedging can be done with almost any kind of bet. Futures bets may be the most popular instance to hedge, but as sports betting grows, in-play wagering is also at an all-time high. If a bet isn't looking good halfway through a game, hedging with an in-play bet could be done. In this case, it's important to note all possibilities in a game because if you make the wrong hedge, you may be out two bets if something crazy happens.

What Does Hedge A Bet Mean

For example, you bet the Titans -7 to beat the Colts and they open the second quarter down 14-0. Since it's looking like the Colts will win, you decide to hedge the Colts moneyline at -150. Unfortunately, the Colts let up in the second half and the Titans eventually win on a late field goal, meaning both of your bets lose. If you want to hedge in-game, it's usually best to know what you're doing instead of blindly betting the opposite side.

How To Hedge A Bet

Another possible hedge method is in a parlay. Luckily, these are a little more straightforward than an in-game hedge. The easiest example is if your first two bets win in a three-team parlay. If you want to guarantee winnings, you simply hedge by betting the opposite side in the third bet of the parlay. You'll guarantee winnings, though the payout will be smaller.