What Is Hedging a Bet in Sports Betting - Complete Guide to How & When to Hedge Your Bets

If you’ve ever asked “what is hedging a bet?”, we're here to help.

Hedging is a common strategy used in sports betting to protect your bet rather than leaving it entirely up to chance.

You lower the risk and make sure you walk away with something, even if things don’t go as planned. 

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What Is Hedging a Bet?

Hedging is a sports betting tactic where you place a second bet or bets that go against your original one. This second wager is called a hedge, and it is meant to either lock in a profit or limit how much you could lose. Bettors use it to protect their bets.

A hedge gives you the chance to play safe and take something home, no matter the outcome of the game or tournament.

The most popular type of bet for hedging is futures bets. For example, if you placed a bet on a team to win a championship at long odds before the season started, and the team made it to the final, you might not want to risk losing everything. Instead of letting the original bet ride, you could place a new bet on their opponent to ensure you walk away with some profit no matter who wins.

Hedging a Bet Example

Let’s look at a specific example.

Say that you placed a $100 future bet on the Denver Nuggets to win the NBA Championship at +800 odds, which is $100 to win $800 in profit. Say the Nuggets have made the NBA Finals. At this point, they’re listed as slight favorites at -120 to win the series.

You can either ride out your original bet or hedge by betting on your opponent; let’s say that it is the Boston Celtics who are listed at +100 to win the Finals. If you choose to hedge, you might place a $400 bet on Boston at +100, which would return $400 in profit if they win.

Here’s how it would play out.

If the Nuggets win, your original bet would pay $800 in profit, and you would lose the $400 hedge, which would result in a profit of $400. If the Celtics win, you would lose your original $100 bet, and the hedge pays out $400, so the profit would be $300.

So, you still would walk away with a solid return, whichever side wins.

How Does Hedging a Bet Work?

Hedging a bet works by placing a second wager that gives you a safety net if your original bet doesn’t win. That, in simple terms, answers the question of what is hedging in sports betting.

Hedging doesn’t just apply to future bets, but it can be used in live betting, parlays, or even single games where the odds or situation have changed.

For example, let’s imagine that you’ve bet on the Lakers to beat the Bulls, and the Lakers are up by 10 points at halftime. You might decide to hedge by betting on the Bulls at much better odds during the break. If the Bulls win, your hedge bet pays out. If the Lakers win, your original bet will pay out.

Hedging is also possible with parlays.

Say that you’ve hit the first three legs of a four-leg parlay and only need one more win to cash out. Rather than leave everything to chance, you could place a bet on the other side of that final game, so if the parlay doesn’t pay out, you still walk away with something.

When Should You Hedge a Bet?

You should consider hedging when there’s a lot at stake and the outcome is uncertain. 

That said, it isn’t always the best move.

You're making a call on value every time you place a bet, whether it’s your original wager or hedge. Essentially, you are deciding if you think the outcome is more likely than the odds suggest.

For example, let’s look at -200 odds. You’d need to believe that the outcome has at least a 66.7% chance of happening to justify placing that bet. If something is listed at +500, it would need a 16.7% chance or better to be worth it.

Now, let’s consider hedging.

Let’s say you have a bet with a big potential payout, and the team you’ve bet on has made it to the final. You consider placing a hedge at -200 on the other side to protect yourself. You have to now consider if you really think that team has at least a 66.7% shot at winning. If not, hedging at that price may not offer enough value, despite the safety net.

It’s not always down to math, either. It really can depend on the situation, such as the amount of money at stake, personal attachment, and whether you’re comfortable with risk. 

For instance, if you stand to win $20, you might pass up a good hedging opportunity simply because you aren’t too bothered. On the flipside, if you find yourself in line to win $2,000,000, chances are you will be much more open to hedging your bet so you still walk away with life changing money, whatever the outcome. 

How to Use Hedging Bets in Sports Betting

Hedging isn’t required all the time for sports betting; instead, it should be used in specific situations as a way to give you more control over the outcome. It’s not about going after big wins but rather about being smart when managing risk if the stakes are high.

Here are three times you should consider hedging a bet:

• Potential Big Futures Win: If you’ve got a long-shot bet, that’s just one win away from cashing out. Let’s say you’ve picked a team to win a championship, and they make it all the way to the final. Betting on the other team - even a small bet - gives you a way to lock in profit regardless of who wins. You won’t get the full payout, but you also won’t walk away with nothing.

• One Leg Left on a Parlay. If you’re one leg away in a parlay from cashing out, you can place a hedge bet on the opposite side of that final bet rather than leave it all to chance. If you don’t, you may lose the whole parlay and make no profit.

• Mid-Game Betting: Sometimes, it can make sense to hedge a bet mid-game if things aren’t going as planned. It could be that your team is performing poorly, a player has been sent off, or you have just lost faith in your side. With live betting, you can react in real-time and place a hedge that helps cut your losses before you lose your entire bet.

Pros & Cons of Hedging Bets

Hedging has its advantages and disadvantages, like any strategy. Before you decide to hedge a bet, it’s important to weigh up these pros and cons:

Hedging a Bet - Conclusion

Hedging isn’t always the right strategy. But it can be a smart move in the right situation. It’s especially useful for sports betting when there’s a lot at stake, giving you more control over the situation and more peace of mind.  

Ultimately, it comes down to personal preference, your own tolerance for risk, and your analysis of the situation. 

Now that you understand how hedging works, you’ll be better prepared to decide when to use the strategy when the opportunity arises.