Hedging Sports Bets
Hedging in sports betting is betting both sides of a betting market to reduce your risk and safeguard against a loss. It also sometimes called scalping. Hedging is a familiar concept in sports betting, but one that is often misunderstood. When it comes to the question of “Should I hedge my bet?”, there are many factors to consider.
Hedging sports bets is theoretically possible in every betting market. However, one of the most common scenarios that bettors find themselves looking to hedge is when they bet futures. In this example, we will focus on hedging a NFL futures wager, which applies to several other types of bets.
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How To Hedge Sports Bets – Explained
The most popular futures market in all of sports betting is the odds to win the Super Bowl. Let’s say at the beginning of the season that you place a bet on the Steelers to win the Super Bowl at 10/1 or +1000 for $100. Fast-forward to the end, and in the playoffs we see that we are close to winning our wager. Pittsburgh is in the Super Bowl as the AFC Champions and they are facing off against the NFC Champion, Cowboys.
The game is a close matchup in the eyes of the oddsmakers. We can take Dallas on the moneyline at +150 to win outright as a possible hedge against our original wagers. If Pittsburgh wins, we stand to make a $1,000 profit and return out $100 stake. Our goal is to place a wager on Dallas that ensures that we profit the same amount no matter which side wins, which would be an optimal outcome.
Convert Moneylines To Decimal Odds
To do this, we first need to convert the moneyline odds of +150 into a decimal value. In decimal odds, this is expressed as 2.50. The easiest formula for calculating a hedge is x = (p + b) / r. There are plenty of betting sites offering advice on hedging bets, but we found the above formula at BetSmart.co to be the easiest to utilize.
Our aim is to solve for x, which is the amount of your prospective hedge wager. P is the profit that we stand to make on our first bet, and b is the amount of your first wager’s money. R is the second wager’s decimal price you’re looking to bet. For this example, our P would be $1,000, which is the amount our bet would pay out if the Steelers win. B would be $100, the amount we wagered on Pittsburgh. Finally, R would be 2.5, the second bet.
Hedging Bets Formula
Our calculation would look like this when plugged into the formula:
X = (1000 + 100) / (2.50)
X = 440.00
To hedge our bet to an achieve an equal result regardless of the outcome of the game, we should bet $440.00. To figure out our net profit when figuring out a hedge, we simply divide x in half. In this case, our guaranteed profit is ($440/2) $220 no matter how the game turns out. This formula can be used for any two-way market. However, just because you know how to hedge doesn’t mean you always should. Looking to hedge at every opportunity is one the biggest mistakes that sports bettors make.
When Should You Hedge Your Sports Bets
Before you decide to hedge, we recommend going over the reasons below to be sure you’re not making the incorrect decision. Many times, when bettors hedge, they do reduce the variance on their wager, but also decrease their EV, which harms their bottom line profits.
The hedge bet involves a -EV or neutral EV betting market
Don’t Hedge: It’s time to let it ride when this is the case. The sportsbooks are excited when you hedge in spots like this because you’re giving away a ton of +EV. The big problem here is that many hedge bets that are already -EV, with another -EV bet. Managers eyes light up when they see their clients placing two -EV bets instead of one.
You stand to win a life-changing amount of money
Hedge: This amount is going to vary depending on who you are (and the size of your bankroll), but if you’re looking for a bet that nets you $10,000 profit or zero dollars – it may be wise to hedge, depending on where you are in your sports betting career. We recommend this course of action in this case, even if the market you’re using to hedge may be -EV or neutral EV.
When attempting a middles sports bet
Hedge: In NFL football, there is often excellent middling opportunities surrounding the 3 and 7, the two most popular margins of victory. If you place a bet at -2.5 or -6.5, and the odds moves to +3 or +7, well, you have a +EV middling opportunity in both spots.
When the second sports bet is +EV
Hedge: Of course, thinking it is +EV and knowing it is +EV are two different things. If you’re clear on your advantage, or you can beat the market to the punch, fire away!
If you make a sports betting mistake
Hedge: Anyone that has a bet sports for a suitable period of time has made an error regarding entering their bets. Sportsbooks don’t allow customers to cancel wagers they have confirmed, so your best bet is to hedge your wager if you make a mistake or find yourself overexposed.
Reputation and the trustworthiness of an online sportsbook are of particular importance when hedging bets. Similar to arbitrage betting, it is vital that both sides of the bet are honored and that the operator can be trusted to play their clients. International sports bettors, particularly those living in regulated will have a much larger set of trusted bookmakers and legal tools to deal with rogue operators. The situation for Americans is a bit different.
If you’re hedging bets, we recommend that you stick to the elite tier of sportsbooks, instead of gambling (no pun intended) with smaller bookmakers. If you’re looking to be speculative and try out sportsbooks that are middle of the road or perhaps slightly below average, save that for another time.
Safe Sportsbooks For Hedging Sports Bets
Before deposing at any sportsbook, we recommend checking out our sportsbook review section. It also may be worth revisiting when you decide to place a hedge wager unless you’re sure of the reputation of the sportsbook. Hedging a bet that turns out to be canceled retroactively or not honored is going to cost players dearly. Honoring both sides is just as important as choosing +EV markets and calculating your hedge bet correctly.
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Hedging Sports Bets – Final Thoughts
There undoubtedly times that players should hedge, but not too often. If you catch a bookmaker with their proverbial “pants down” and the market readjusts after you have placed your wager, it’s almost always incorrect to hedge in this scenario. An excellent example of this is our NBA betting article about wagering closer to tipoff. When players are ruled out for rest or injury, there are times you can beat the sportsbook to the punch. The sportsbooks typical adjust immediately, and the injuries or changes are reflected in their new odds.
We have seen many sports bettors and other betting websites calling for players to hedge in this scenario, which is some awful advice. If you can place a wager before the market adjusts to late-breaking news or find a rogue line, hedging bets should not be the first thing on your mind. In fact, it’s exceedingly rare that you might find +EV hedging opportunity in this case.