Hedging Bets: Meaning, Sports Betting Examples & Expert Analysis

You could always ride out your parlay, and if your team wins the sixth game you will win $4,741, but if they lost you would get no profit and actually be down $100. What you could do is bet $2500 on the other team going into the last game. This way, you would lock up a profit regardless of who wins thanks to your hedge. Let’s look at an example where a hedge bet might help you lock up some money.

Your Guide to Hedge Betting

If you carry out your own research, you can take advantage of the bookies’ skewed lines. Moneyline Betting Guide Learn everything there is to know about moneyline betting with our comprehensive guide. Prop Betting Strategy Discover the different types of prop bets and unlock our expert tips.

For instance, if a bettor has the OVER 43.5 on a Saints-49ers game, and the in-play over-under slips to 37.5, this is not a time to hedge the UNDER. Bettors will either lose the vigorish, or if the final score lands between 38 and 43, they’ll lose both wagers. If they’re quick, they can grab the other side and only lose the vigorish. Or if their team was winning before disaster struck, they may even be able to lock up a few pennies.

The profit is in the spread between the two positions, similar to trading. This approach can be used in futures hedge positions, especially in tournaments like the NFL playoffs or March Madness. No matter who wins, you turn the promo into a cash-positive outcome.

This tail risk required monitoring but couldn’t be fully hedged. The best NFL bettors are consistent, disciplined, and adaptable. Using a system is rooted in making smarter bets over time, not chasing a single big score. This is a never-ending debate in the sports betting community, extending all the way from internet forums to the most successful sharps in sports betting history. However, these two formulas can help you calculate how to prevent a loss and secure maximum profit via hedging. Of course, the amount you’d need to wager in order to secure a profit would depend on the specifics of the moneyline odds pinup casino in your parlay.

Features of Hedging Bets

A positive expected value indicates that your bet has a higher probability of winning than the odds suggest. Combining bets with positive EV in a same game parlay can increase your chances of achieving a profitable outcome. For example, you bet $100 on the Dolphins to cover a -3 spread against the Jaguars. The Dolphins lead by four points in the fourth quarter, so you bet $50 on the Jaguars +4.5.

This may be worthwhile in high-stakes situations, but over time, excessive hedging can eat into your positive expected value (EV) and long-term profitability. Every bettor makes different decisions based on their perferences. No player is mandated to follow a specific strategy or action. Hedge betting is a personal wagering preference that is quite popular among the more cautious bettors and is a great way to mitigate losses.

In this hypothetical, the Chiefs open at +5100 the day after the Super Bowl (maybe Patrick Mahomes retired unexpectedly?). If you wagered $100 on them on that day, and they make another run to the Super Bowl the following year, you’re looking at a potential profit of $5,100. By placing a hedge, you often give up part of your potential return in exchange for safety. Additionally, extra vig and incorrect timing can hurt your overall value and diminish long-term expected value.

It’s part of a broader risk management betting approach that views long-term profitability over single-bet glory. Every hedge bet should be sized according to your bankroll unit system, with exposure limited to amounts that won’t derail your strategy. The most straightforward hedging strategy is the classic hedge, which is the first thing you need to learn in terms of how to hedge a bet.

What is Hedging A Bet? Hedging Non-Future Bets

Points are awarded for each correct prediction, with higher stakes often placed on later rounds and the ultimate winner. Best March Madness Betting Sites See which sportsbooks have the best odds, line variety, welcome bonuses, and more. While March Madness is played on neutral courts, travel and fan presence still matter. A team playing close to home or backed by a massive fan base (like Kentucky or Duke) might enjoy a pseudo–home court advantage.

Sportsbooks set point spreads by considering various factors, including team/player statistics, recent form, and head-to-head records. They aim to level the playing field and attract equal betting on both sides. In point spread betting, the moneyline favorite is given a virtual deficit to overcome, with the underdog handed a virtual head start.

• Points spreads are good bets to wager on, especially in the case where a game features a heavy mismatch.
• You hedge by betting $300 on the other team at -150, so you profit either way.
• Let’s say you placed a $100 bet on the New England Patriots to win the Super Bowl at +300 odds.

Hitting six out of seven legs generates the same profits as zero out of seven – zero. Imagine instead that the Bills were -240 moneyline favorites and the Chiefs were +200 dogs. The bettor would only have to wager $50 on Kansas City to cover the original bet. At the worst, the underdog wins outright and however many dollars put on that last leg can be the profit (minus the original $10 wagered). This article is part of a series examining institutional hedge fund trades with emphasis on precise mechanics and risk management. Any scenario where MSTR moves independently of Bitcoin transforms a “market-neutral” trade into a directional bet.

While you can leave this as is and hope the Dolphins pull it off, there is a way for you to lock up some profit. Let’s take a look at an example of a very common hedge bet opportunity to make things clearer. By exploring the fine details of hedging in this guide, you’ve gained insights into its benefits and limitations. With careful management of both long and short positions, hedging is a unique way to deal with unstable situations. The dynamics of contrarian views on similar pairs are more obvious over shorter periods, providing windows of opportunity for successful hedging. The hedging approach, particularly involving correlated pairs, is most effective on lower timeframes.

You’re still hoping your original bet hits, but the hedge offers a soft landing. This is especially popular when you’re one leg away from cashing a parlay. Let’s apply the same idea to Super Bowl LIX, featuring the Kansas City Chiefs and the Philadelphia Eagles.

For instance, a heavy favorite in college football may offer little betting value, but the odds of them covering the spread at say -19.5, provides a more reasonable return. First, you can back the favorite to win by the margin set by the sportsbook. If your bet is successful, you’ve “covered the spread.” Second, bets on the underdog win if the underdog wins outright or loses by fewer points than the sportsbook’s margin. When choosing the games and teams you’re wagering on, studying the necessary stats and trends is essential. Consider winning/losing streaks, head-to-head records, player performance, injuries, and other relevant factors. However, if you’re serious about teaser betting, we can share our top tips to increase your chances.