Making a bet on your favorite sports team can be fun, but what happens when the game doesn’t go the way you expected? If you’re like most people, you probably feel pretty disappointed. However, there is a way to ensure that you never lose money on a sports bet, hedging your bet. Hedging bets can be a great strategy for you to ensure at least some profit. This article will discuss what hedging your bet means and when you should use it to make sure you come out on top. We’ll also look at some examples of how hedging can be used to guarantee profit. So if you’re ready to start winning more bets, keep reading!
What Does Hedging Your Bets Mean?
Hedging bets is a risk-averse method of taking sports betting’s high volatility and numerous outcomes. A hedge bet is a bet on the opposite side of an initial wager on a sporting event. A hedged bet is when a sports bettor makes a new wager on the other side of their original bet. The probability of winning their first wager has improved.
Let’s take a look at a simple example:
You bet on the New York Yankees to Win the 2022 World Series at the beginning of the season at +1097 ($100 to win $1,197). Your initial bet at +1097 looks amazing because those odds are no longer available. Fast forward to September, and the Yankees are now in the World Series final against the Los Angeles Dodgers.
You’ve arrived at a fork in the road. You can either do nothing and let your bet ride or hedge your bet.
Deciding to hedge your bet would mean placing a bet on the New York Yankees to lose. It will cut into your overall possible profit, but it will guarantee you win something.
When should you hedge a bet?
Let’s go over the many types of hedge bets available and why you’d want to make them. There are a few reasons you may consider hedging your bet:
- To minimize risk
- To guarantee profits
- To account for game changes and news
It’s crucial to look at the risk/reward aspect when placing bets. What is the chance of winning a particular wager? The environment may change, or you could be given an opportunity to place an additional bet with a higher probability of winning after making a wager. This is one instance where you might be able to reduce your risk.
Sometimes, you may be given a chance to guarantee earnings. When the probability of your initial wager has substantially improved in your favor, but you still believe the first bet might lose, this is known as a hedge bet. When this happens, the odds on the opposing side of your initial wager swing considerably in your favor. This allows you to risk less money on your hedge bet and receive a higher payout than you wager.
Your hedge bet amount will most likely be higher than your original wager. Your initial wager was extremely unlikely, and hedging leaves you with a life-changing sum of money whether the situation succeeds or fails. It’s usually good to hedge if your original wager won’t lose you as much money as the opposite option.
One last situation to consider is any changes in the game or news. Is a crucial player unavailable? Did the forecast change for a baseball game? Did a new umpire get assigned to a game? Whatever the cause, if there are significant enough factors that alter your outlook on an event outcome, it might be worth putting a hedge on your original wager. In this case, you may bet against the other side to earn more money – effectively canceling your original bet. Alternatively, you may place your hedge bet as close to identical to your original wager to minimize losses and attempt to break even overall.
What is Arbitrage Betting?
To guarantee a profit, some gamblers use arbitrage betting. Arbitrage betting is when a bettor stakes money on every possible outcome to ensure they win something. This technique is similar to hedging, but rather than reacting to new situations on your wager, you intentionally are taking both sides of a bet. Arbitrage betting only works when you have access to multiple sportsbooks and can find different odds for the same event. Let’s take a look at an example of arbitrage betting on baseball:
The Cincinnati Reds vs. The New York Mets
Book A:
- Cincinnati Reds Moneyline -162 ($100 to win $162)
- New York Mets Moneyline +145
Book B:
- Cincinnati Reds Moneyline -180
- New York Mets Moneyline +170 ($100 to win $270)
In this situation, you would wager $100 on the Cincinnati Reds to win at Book A and $166.95 on the New York Mets to win at Book B. No matter the outcome, you will profit 1.13% or $3.05.
Arbitrage betting sounds enticing, but there are a few things to remember. First, you need to have enough money to cover all potential outcomes. You would need to wager $266.95 on all bets in this scenario. This quickly becomes a very capital-intensive strategy. Second, while you are guaranteeing profit, you will need to bet a large sum to earn a meaningful amount of money.
Arbitrage betting works in two scenarios: if two sportsbooks offer significantly different odds on a given matchup or when the betting line changes over the time leading up to the start of the game. However, because this type of opportunity would potentially be costly to sportsbooks, these types of bets are often hard to find. And to find enough options, you will likely need to operate quickly to beat any line movement.