Hedging Your Bets

Content curated from and authored by Clear Data Sports

The phrase “hedging your bets” has been around since the 1600s and comes from the actual planted hedge that is used as a fence to enclose a plot of land. The hedge limits a specific area, thus limiting the risk, as we use the phrase today.

And that is what the betting strategy of hedging your bets is all about: Limiting risk.

What Is Hedging?

Hedging your bets is a strategy that involves placing bets on different outcomes to reduce your risk of loss and possibly guarantee a profit. Even if the bettor thinks they will win with just the original bet, hedging is used as a safety net.

And while it might reduce the overall profit of the bet, it can be used to guarantee some profit. Or, at the very least, reduce the overall loss.

Consider it the car insurance of the sports betting industry. I may never get in an accident and actually need the insurance, but thanks to the insurance, I know that I will never suffer a huge and unexpected loss.

How To Hedge Your Bets

When placing the original wager, it’s quite likely that the bettor isn’t yet thinking about a hedge. If I put $100 on the Seahawks to win the Super Bowl back in August, I got 32/1 odds. That’s great value now since those odds have dropped all the way to 8/1. I might be in line for a really big payday.

But the Ravens and Saints have emerged as the favorites, and even though I like my Seahawks bet, I decide to put $50 down on each of those teams. I now have a potential $3,200 payout from Seattle, $250 payout from New Orleans, and $200 from Baltimore.

Obviously, I do best if the Seahawks lift the Lombardi Trophy at the end of the season. But if any of the three teams win, I will, at worst, break even since I’m now in $200 worth of bets.

And when the Super Bowl rolls around, and it ends being Seattle vs. Kansas City, as an example, I could hedge even further by putting money down on the Chiefs.

Parlay Hedging

Parlays are the other most common type of bet that is hedged because hedging works best when the possible reward is the highest, like with futures bets.

If you have a $50 four-team parlay that pays 12/1 odds, and you’ve hit on the first three games, you are in line for a $600 payout. But only if that last game also hits. So putting $100 down on the opposite result for that fourth and final game makes sense.

You are now betting risk-free. If you win, you win $600 minus the $100 hedge. But if you lose, you win $50. So you can’t lose.

Low-risk, low-reward bets aren’t great for hedging. But if you are looking to reduce or eliminate your risk, and, in some cases, guarantee some profit on high reward bets, think about using a hedge.