Hedging

Hedging means betting against yourself to guarantee a profit—or limit a loss—regardless of outcome. You've got a winning position, now you can lock it in. The technique is borrowed from financial markets where hedging manages risk on investments. In betting, it's most powerful for futures bets that have gained significant value, or live bets where circumstances have changed in your favor. Hedging trades maximum upside for certainty.

Table of Contents

• How Hedging Works
• Calculating Hedge Bets
• Types of Hedging
• When to Hedge
• Hedging vs Cash Out
• Hedging Strategy

How Hedging Works {#how-it-works}

Hedging places a bet on the opposite outcome to your original wager, creating guaranteed profit regardless of result.

Simple Example

Original bet: $100 on Team A to win championship at 10.00 (potential$1,000)

Team A reaches the final against Team B. Team B odds to win final: 2.00

Without hedge:

• Team A wins: +$900 profit
• Team B wins: -$100 loss

With hedge ($450 on Team B):

• Team A wins: +$900 -$450 = +$450
• Team B wins: -$100 +$450 = +$350

You've locked in profit either way.

The Hedging Principle

Calculating Hedge Bets {#calculation}

Equal Profit Hedge

To make equal profit regardless of outcome:

Example:

• Original: $100 at 10.00 (returns$1,000)
• Hedge odds: 2.50
• Hedge stake: ($1,000 -$100) / 2.50 = $360

Wait—that's not equal. Refined formula:

Corrected:

• Hedge stake: $1,000 / (2.50 + 1) =$1,000 / 3.50 = $286
• If A wins: +$900 -$286 = +$614
• If B wins: -$100 + ($286 × 1.50) = -$100 +$429 = +$329

Still not equal! For truly equal profits:

Most accurate method:

Use a calculator for precision.

Guaranteed Profit Formula

Total guaranteed minimum profit:

Hedge Calculator Table

Original: $100 at 10.00, various hedge odds:

Higher hedge odds = smaller hedge stake = more profit locked in.

Types of Hedging {#types}

1. Futures Hedge

Most common. Hedge a long-term bet as the event approaches.

Example: Premier League Winner

If Liverpool wins: +$700 -$280 = +$420 If City wins: -$100 + $420 = +$320

Guaranteed profit from futures bet.

2. In-Play Hedge

Hedge during live betting as situation changes.

Example: Tennis Match

• Pre-match: $50 on Player A at 3.00
• Player A wins first set, now 1.40 to win match

Lock in profit on positive situation.

3. Middle Hedge

Bet both sides with potential to win both bets:

Example: Point Spread

• Book A: Team X -3.5 at 1.91 ($100)
• Book B: Team X +4.5 at 1.91 ($100)

The "middle" (exactly 4) wins both. This is closer to arbitrage than pure hedging.

4. Accumulator Hedge

Hedge final leg of accumulator to guarantee profit:

5-leg accumulator:

• Stake: $20
• Legs 1-4 won
• Final leg potential: $800 return
• Final leg: Team Z to win at 1.80

Hedge: Back opponent at 2.50

When to Hedge {#when-to-hedge}

Hedge When:

Don't Hedge When:

The Bankroll Rule

Common wisdom: Hedge when potential win exceeds X% of bankroll

Hedging vs Cash Out {#vs-cash-out}

Direct Comparison

Scenario: Accumulator worth $500 potential, 1 leg remaining

Wait—cash out is better here? Let's recalculate:

Hedge math:

• If original wins: $500 -$220 = $280
• If opponent wins: -$100 (original accumulator cost) +$220 = $120

Hmm, the guaranteed minimum from hedge ($120) is worse than cash out ($350).

Key insight: Cash out considers ALL previous legs' value. Hedging only addresses the final leg.

When Each Is Better

Math Comparison

Always calculate both before deciding:

Cash Out Value: Whatever bookmaker offers Hedge Value: Calculate minimum guaranteed outcome

Choose whichever is higher.

Hedging Strategy {#strategy}

Strategy 1: Pre-Planned Hedge Points

Before placing futures bet, decide:

• At what stage will I consider hedging?
• What guaranteed profit would trigger hedge?
• What hedge odds are acceptable?

Strategy 2: Partial Hedging

Don't hedge 100%—hedge enough to cover original stake:

Original: $100 at 10.00 (potential$1,000) Partial hedge: $100 on opponent at 2.50

You've eliminated downside while keeping most upside.

Strategy 3: Scaled Hedging

Increase hedge as event approaches:

Strategy 4: Use Betting Exchanges

Exchanges offer better hedge opportunities:

Exchange laying often provides best hedge value.

Hedging Mistakes {#mistakes}

Mistake 1: Hedging Too Early

Hedging a futures bet in round 1 of 4 locks in minimal value. Wait until later rounds.

Mistake 2: Hedging Everything

Some bettors hedge every winning position. This guarantees you'll never maximize a good bet. Selective hedging only.

Mistake 3: Ignoring Hedge Costs

Every hedge bet includes bookmaker margin. You're paying for certainty.

Mistake 4: Emotional Hedging

Hedging because you're nervous (not because math supports it) is -EV long-term.

Related Calculators

• Hedging Calculator - Calculate optimal hedge stakes
• Arbitrage Calculator - Related guaranteed profit strategies
• Cash Out Calculator - Compare to cash out offers