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How To Hedge Your Bets

Published on October 11, 2017 by Dila Dilzoda

With the sharpest of the bettors winning 50-60% of the time, predicting an outcome in sports is far from easy. Even when there is an obvious favourite, wagering a large sum for the duration of a tournament at a high risk for measly reward is not so appealing. Hedging is one of the best yet most overlooked way of securing a profit regardless of the outcome.

The concept is based on placing bets on various outcomes subsequent to an original bet to create an end result that returns a profit regardless of whether the original bet wins or loses.

You might be familiar with arbitrage betting, which relies on finding inconsistencies between bookmakers’ odds and placing simultaneous bets on all possible outcomes. Hedge betting, however, is taking advantage of a shift in odds over time, often due to a change in circumstances or opinion.

For instance, let’s say you bet €50 on a hypothetical, slightly weaker Team A to win in Euro 2018 at 40/1. You would be on the verge of pocketing €2,000 if that team reached the final to play Team B, which was the favourite.

Stake

Odds

Profit

Team A Win

€50

40/1

€1,000

Team B Win

€1,000

4/5

€800

However, you could hedge the bet by backing Team B.

If Team B were, say, 4/5 favourites to get the trophy, a €1,000 bet would bring a profit of €800. On the other hand, if Team A wins it would be a profit of €1,000.

In the above example, you would have to remember to back Team B to be the victor, as opposed to winning the match in 90 minutes, as a draw would wipe out that side of your bet.

Fortunately, hedge betting lets you distribute the risk, based on your judgment regarding the final outcome. In the previous example, the bet is €1,000 on each side, but it is possible to adjust the stakes to shift the risk. For instance, if Team A had three key players suspended for the final, you might consider putting more on Team B to make sure that the return from that side of the bet would be more profitable.

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