What Does It Mean To Hedge a Sports Bet or Wager?

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

.

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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