Hedge betting is one of a number of betting strategies used in modern sports betting. While not too well understood among rookies and beginners in sports betting, it is a concept that most pros have a grasp of. Success in sports betting involves minimizing loss while maximizing potential for profit. This may not be a big concern for leisure gamblers but it’s certainly vital for those whose aim to is to earn a bona fide income. There are several ways of achieving this, but few strategies are as effective as hedge betting for this.
What Is Hedge Betting
Dictionaries describe a “hedge” as a fence. This means that when hedging something, one is trying to protect it. In business, a hedge investment is made to counteract the effect of a potential loss of the main investment. Now since sports betting is also a financial investment, in a way, hedge betting follows the same lines. A hedge bet is a wager made to mitigate against the potential loss of another bet. To achieve this, the hedge bet has to cover an alternative, contrary outcome to the one forecast in the main bet. A great example is backing both players in a tennis match. This would mean that no matter what happened in such a match, at least one bet would win. Conversely, the other bet would lose. Ultimately, for the hedge betting technique to work, the main bet and hedge bet must cover the entire probability space of the event. That’s why a sport like tennis is perfect for this strategy. A game like soccer, on the other hand, is not as well suited since there’s a third possible outcome – a draw. Hedge betting is a form of risk management. A way for a punter to “insure” his bet. Let’s look at situations where hedging would be an excellent move.
1) Reducing Potential Loss
There comes a time in every sports gambler’s career when one makes a decision and then doubts themselves. On the modern betting scene, it happens more often than one would like to admit. Say its Chiefs squaring off against the Buccaneers in the NFL. Chiefs are favorites and so the punter makes the sensible decision to back them. But then, in the lead-up to the game, two of the Chiefs’ key players – including their star quarterback – fall to injury. This shifts the punter’s perspective, and so they no longer believe that Chiefs will win. The above situation calls for hedging as a protective measure. A second bet – usually with a smaller stake – can be placed, backing the Buccaneers. Should the hedge bet succeed, it would help recover most if not all of the stake on Chiefs, since the underdogs always command high prices. Sometimes, should the punter make back more than the stake on the original bet, they may even be able to turn a small profit. This strategy is also applicable where a bet has been made in error and is irretrievable. It may come as a surprise but, even in this day and age, many bookmakers still don’t allow bet cancellation.
2) Locking In A Guaranteed Profit
On a seldom occasion, much rarer than a blue moon, there comes a situation where a punter stands to make profit no matter the outcome of a sporting event – if they play their cards right! Here is a tennis example for illustration.
Rafael Nadal
Stan Wawrinka
1.5
11
The punter places two bets, backing both players – $10 on Nadal to win, and $50 on Wawrinka. With a total stake of ($10+$50) = $60, the potential outcomes would be:
Nadal wins : Profit $75 – $60 = $15
Wawrinka wins : Profit $110 – $60 = $50
No matter who won this match, the punter would be assured a profit. The net gain from a Nadal win would be $15, and $50 for an unlikely Wawrinka win. It would obviously be preferable if the latter won, but life would be good in either case. A hedge betting situation like this is the very definition of beating the bookies!
Tags:Hedge BettingReducing Potential Loss
