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How To Hedge A Bet

The term ‘hedge your bet’ first came about many years ago, when George Villiers, the 2nd Duke of Buckingham, used the phrase during a play.

  • The Basics of Hedge Betting. The best way to view hedge betting is to think of it as a form of insurance. It’s actually a relatively straightforward strategy at its core, with the basic idea being to protect existing bets against potential losses. This is done by betting on.
  • In sports betting, hedging a bet means betting both sides of a game to safe guard against a loss. Let’s say at the start of the American football season you put $1,000 on an 8 to 1 shot winning the Super Bowl. They eventually make the Super Bowl as the favorites. The night of the game their opponent is 2 to 1.

But, how do you hedge a bet? This term is very common in modern gambling and refers to a bet with reduced risk and potentially guaranteeing a profit.

We will explore what is hedging a bet and provide examples and leave our readers with a clear understanding of the term.

How to use the Hedge Betting Calculator –. Enter the stake and payout of the original bet along with the odds of the other side of the bet (your hedge). The Hedge Betting Calculator will determine the optimal stake for the new bet to maximize guaranteed profit. If you do make an error when placing a wager, you basically have two options. The first is to simply let the bet ride, and hope that it ends up winning. This is not exactly ideal, as you’ll basically have risked money that you didn’t want to risk. That’s never a good situation to be in. Hedging a bet is only possible as we see a shift between opening and closing odds. Changes in the odds open up for hedging bets, meaning the potential loss is outweighed by the perceived gain elsewhere. This is why we see the term “Hedge fund” used on Wall Street today. As we see in many betting systems, it’s not the perfect system.

What is Hedging?

Hedging is used to reduce risk in certain situations. For example when betting and the odds have:

  • Shortened after an initial bet.
  • Drifted after an initial bet.

By using this strategy, bettors will minimize the risk of their bet and reduce any possibility of a nasty surprise. It’s important to take not of the odds throughout the period leading up to the payout.

Hedging Bets for Profit

The principle of placing bets on various outcomes to produce a result that pays out to the bettor regardless of whether the original bet wins or loses. This is what all bettors aspire to find when employing their own betting strategy.

How To Hedge A Bet

Hedging a bet is only possible as we see a shift between opening and closing odds. Changes in the odds open up for hedging bets, meaning the potential loss is outweighed by the perceived gain elsewhere. This is why we see the term “Hedge fund” used on Wall Street today.

Bet

As we see in many betting systems, it’s not the perfect system. But losses can be mitigated, allowing for profits to be made, but losses can be made in numerous areas of a bet. There’s always a risk.

Examples of Hedges Bets

So if you’re line shopping and decide to hedge your bets on one particular market, we’d advise going with a mainstream sports market like the NFL.

  • Take, for example, a bettor places $100 on the Colts to win the Super Bowl before the season begins at +350. The bettor would be in with a strong chance of winning if they made it to the Super Bowl that year.

So in this situation, the bettor is still very unlikely to win the bet, as they are still outsiders in a strong league.

  • This situation presents the bettor with the opportunity to hedge their bets by backing the other Super Bowl team, the Steelers, to win the game. If the Steelers are +150 to win the title, then a $100 would yield $250.

Meaning regardless of the outcome the bettor will be making a decent profit, having hedged his bets on both teams at the Super Bowl. It’s important to remember in this situation to back the Steelers to lift the trophy, not just to win the game.

While we’ve provided examples of hedge betting for the NFL, it is common in a variety of sports. Let’s take a less common example of Champions League soccer matches.

  • A bettor places $100 on Manchester United to win the Champions League as a future bet at `+350. The bettor may choose to hedge their bets on the day of the final, covering themselves by hedging their bets on the other team Bayern Munich.

How Sportsbooks Hedge bets

Sportsbooks are regularly hedging bets so that they can limit their risks and maximize profits. They do this by positioning themselves to make money by limiting the damage of big wins from punters.

By laying off large amounts of their liabilities, bookmakers are able to ensure that the money doesn’t flow out of their own funds – the sportsbooks bankroll management!

It acts as a kind of insurance, oddsmakers use the money they have taken in bets and use it to hedge their bets against potential losses.

Types of Hedging Bets

While we see players make hedge bet wagers all the time, there are two other ways which we will include below with examples to make things clear.

The sports betting industry is evolving and changing all the time, as such we try to ensure our readers get the full picture and know what they’re doing when they start wagering online.

Adjust Hedging

One option available to bettors is to adjust the stakes to shift the risk. Using the Super Bowl example we gave earlier, the bettor may decide to place more on the Steelers as the Colts QB is out injured.

How To Hedge A Golf Bet

This would obviously add weight to the stake meaning the profits on that side of the bet would be lower. A sharp is always able to find balance and weigh their bets for maximum profit.

Hedging Bets on In-Play Markets

As we mentioned before, hedging is based on movements in the market. So if the odds of a given outcome are likely to change during an event.

How To Hedge A Bet

How To Hedge Sports Bets

  • Take for example the World Cup Final. If one team scores a goal early on the odds will change, allowing players to enjoy additional markets. Hedging your bets on In-Play markets is quite a popular wager to make.

This works with in-play betting markets. If the underdog scores to take the lead, the potential profit from the bet can be used to back the favorite, thus guaranteeing a return on your wager.


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Related to hedge bets: hedge fund

hedge (one's) bets

To take an action in order to offset a potential future loss. I'm not too confident that I'll get the lead in the play, so I'm hedging my bets by trying out for several roles.
Farlex Dictionary of Idioms. © 2015 Farlex, Inc, all rights reserved.

hedge one's bets

Fig. to reduce one's loss on a bet or on an investment by counterbalancing the loss in some way. Bob bet Ann that the plane would be late. He usually hedges his bets. This time he called the airline and asked about the plane before he made the bet.John bought some stock and then bet Mary that the stock would go down in value in one year. He has hedged his bets perfectly. If the stock goes up, he sells it, pays off Mary, and still makes a profit. If it goes down, he reduces his loss by winning the bet he made with Mary.
McGraw-Hill Dictionary of American Idioms and Phrasal Verbs. © 2002 by The McGraw-Hill Companies, Inc.

hedge one's bets

Lessen one's chance of loss by counterbalancing it with other bets, investments, or the like. For example, I'm hedging my bets by putting some of my money in bonds in case there's another drop in the stock market . This term transfers hedge, in the sense of 'a barrier,' to a means of protection against loss. [Second half of 1600s]
The American Heritage® Dictionary of Idioms by Christine Ammer. Copyright © 2003, 1997 by The Christine Ammer 1992 Trust. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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