In this article, we explore how to hedge your bets. This is an outstanding method of reducing risk in sports gambling. If you’re looking for ways to optimize your wagers, you’ll want to learn more about this strategy. We will discuss the principles and rationale behind hedging as well as provide examples of how to use it.
Key Points
– Learning how to hedge bets can help bettors minimize risk.
– Bettors that know what to look for can use hedging as a betting strategy.
Reducing Risk in Sports Betting
When it comes to making financial decisions, taking risks is inevitable. But what if you could minimize those risks and potentially increase your returns? That is where learning to hedge your bets comes into play.
In the investment world, hedging allows you to protect yourself against unexpected market fluctuations. Hedging involves making strategic trades or investments that work to offset potential losses from your initial investment. That’s why investors use it when dealing with millions of dollars.
It’s the same in the gambling world. A sports bettor makes a pre-game or futures bet. That bet is not going as planned, so the bettor makes another bet on the other side. He does so in a way that, regardless of the outcome, he makes a profit.
ICYMI: WHAT IS EXCHANGE BETTING
How to Hedge Your Bets
As mentioned a hedge is a tactic used by a sports bettor where he places a wager on the other side of a bet he has already made. To better help understand this concept, let’s take a look at an example.
An NFL bettor likes the Kansas City Chiefs to win the Super Bowl. It’s early in the betting cycle with the season just beginning and the Chiefs are given +6000 odds. Getting a team like Kansas City at those odds is just too good to pass up. A $100 bet will pay out $6,000 if the Chiefs win.
As the Super Bowl approaches, the Chiefs win the AFC title and will take on the NFC champion San Francisco 49ers. Just in case, our bettor goes ahead and places a $1,000 futures bet on the Niners to win the Super Bowl at +200. This is the hedge.
In the end, the NFL bettor still makes out. The Chiefs win the Super Bowl and the initial futures bet pays out $6,000. The bettor loses the $1,000 on San Francisco for an overall profit of $5,000.
If the 49ers would have won, our bettor would have won $2,000. He would be out the $100 he put on the Chiefs back at the start of the season. That means he would have netted $1,900. Without the hedge, our bettor wins nothing and loses his $100. This is a great example of how you hedge your bets.
Reduce Potentially Costly Losses
The biggest advantage of learning how to hedge your bets is reducing any potential losses. With the advent of live betting, sports bettors now have all sorts of opportunities to hedge their bets.
Let’s say you place a bet on basketball totals in an NBA game. You bet on the Over. The pace is much slower than expected and early on it appears that the game is likely to go Under the original game total.
As the game proceeds to the third quarter, you find an equal or better opportunity on the Under. One team then begins to pull away. The starters go to the bench and the game eventually goes Under the total.
Your initial Over bet loses, but it is protected by the live bet you made on the Under during the game. At the very least, you don’t lose as much as you could have.
Strategies for Implementing an Effective Hedge
As any seasoned sports bettor can attest, hedging your bets can be a powerful tool in your arsenal of sports betting strategies. While it may seem counterintuitive to bet against yourself, the goal is to ensure that you still come out ahead regardless of the final outcome.
Implementing an effective hedge takes some planning. You have to be aware of odds, potential payouts, and value. Bettors must be able to weigh the different outcomes and find a hedging bet that makes sense.
Well-executed hedges can turn a losing bet into a winner and can also minimize the losses from a poor pre-game bet.
Any hedging strategy requires research and knowledge of what to look for. As in the examples above, the bettor knew what to look for on the other side of his earlier bets.
Calculating Your Profits from Learning How to Hedge Your Bets
Hedging your bets is a great strategy, as long as you end up either making a profit or minimizing losses. You don’t hedge your bets to lose money.
If you made a pre-game bet on a favorite to cover a spread, you wouldn’t blindly bet against yourself just because the favorite is getting blown out. Placing a bet on the other side of a wager you already made has to make financial sense.
Maybe you bet on an MLB team to win on the moneyline. You made the wager on the Twins, for example, at -142. A $10 wager wins $7.04. Minnesota’s starting pitcher gets hurt early and leaves the game. The Twins are down by a couple runs in the middle innings.
You place a bet on the opposite side of the bet. The Tigers are now a -125 favorite. Detroit goes on to win and you win $8. You end up putting out $20 and getting back $18. Instead of losing $10, you lost $2. Bettors must understand how to calculate profits and losses from hedging.
In conclusion, hedging can be a great tool for reducing risk. It is important to understand how to profit from a hedging strategy. When you know what to look for, hedging your bets is a great way to make sure your produce wins.
