What It Means To Hedge A Bet

Whether you are betting on sports, investing in stocks, or any other financial investment, you will at one point look to protect your money.

As a simple explanation, Hedging your money can be thought of as ‘insurance’ on investment to protect yourself from possible losses. In finance, it is used as a strategy or device that limits any potential loss on financial assets and ensures long-term growth for a company.

Sports betting is the same way, where the bookie, or you, can set up hedges on bets that protect both sides of an outcome.

When the book sets up a hedge, they do it through a cashout function. This allows you to cash in early, while the bookie avoids the risk of paying you what you would have one when all bets in your bet slip are finished.

This article will look deeper into hedging in sports betting and how it can be done. Before we get going, you have to know that there is a difference between a hedge bet and an arbitrage bet. Hedge betting is legal, while arbitrage betting is illegal and will get you banned.

Hedging in sports betting is commonly done on tennis bets. One of the most famous tennis bets you will see is where the underdog player pulls out at the first set but still plays 2nd and 3rd sets.

To hedge this bet, place two separate bets: one on each of the two outcomes. A common way to do this is to hedge with an alternative bet on this match. So let’s say you are betting on the +3.5 set underdog player in a tennis match. After they pull out at the first set, you will want to place two bets: one where the player wins 2nd or 3rd set outright, and one where they beat the second set but lose the third. You can also hedge with an alternative bet or match on this same tennis event to cut your losses if the first bet fails. By hedging a chance on a loss, you win a smaller return than if you just let that bet ride and hope for the best.

Hedging a basketball bet can be a little more challenging to pull off since there are more outcomes on the spread. One of the best ways to hedge a basketball bet is to place two separate wagers on the spread and the other on the over/under.

For you NBA fans, let’s say you have been watching this game on TV, and you think the San Antonio Spurs are going to win, but they’re only favored by 1.50. Taking a deeper look into this game, you notice that Tony Parker is out of the game with an injury. After more research on this team, you find out their backup center is injured and won’t play either.

What you want to do is hedge this bet by adding a handicap. In this case, we will give the point spread right away and then add -5 for the Spurs. This gives us a new line of San Antonio -6.5 (1.50 + 3.00 = 4.50)

You would now want to bet this new line on the Spurs. If they lose, you will win both bets: one for Spurs +1.50 and the other for San Antonio -6.5 (-110).

Hedging a baseball bet can also be difficult since there are so many different outcomes in the game itself.

Let’s say you are betting the Yankees 1.50 on a game where A-Rod is looking to have a big day. Before the first pitch, A-Rod hits the disabled list with a hamstring injury and will not play for at least two weeks. You can’t let this bet ride, so you will want to hedge this wager.

One of the best ways to hedge a baseball bet is to place a separate bet on both sides of the line you are betting on. In this case, we will want to take our original bet and add bet to that same wager: A-Rod doesn’t play and another where he does.

So let’s look at our original line. We want to bet the Yankees 1.50 where A-Rod gets a hit and is in the starting lineup. After some research, we see that his hamstring injury is not severe, and he will be batting third for this game against a righty pitcher.

Since we know he won’t get a hit in this game, we can add a bet that he will not get a hit to the same wager. In this case, we would bet that A-Rod will go 0-4 with four strikeouts.

As mentioned before, the Yankees are about 1.50 favorites to win this game, and you can now bet both sides of this line. You will now have a wager on the Yankees -1.50 to win, and one where A-Rod goes 0-4 with four strikeouts at +650.