If you are new to sports betting, there are a lot of unique terms to understand. One that you might see frequently is the hedge bet. What exactly is hedge betting? Bet Station is here to give you a complete explanation of hedge bets, including plenty of examples.
In its simplest terms, a hedge bet is a wager which you can place to help cover your losses. Whenever you bet on a sporting event, you put your cash on the line, hoping to win more. However, some wagers will return more than others. Say you want to bet on a risky event but don’t want to walk away empty-handed. You could place a hedge bet alongside your existing wager.
Whenever you see someone mention hedge betting, think of it as insurance. When you're unsure if the original wager will come true, you can bet on the opposite outcome. You need to ensure the amount hedged will match the stake of the first bet. Plus, the second wager needs to be the right size not to take up too much profit. When the event is over, one of your two bets should end up a winner.
What is Hedge Betting?
To understand how hedge betting works, you should also learn about the various wagers you can place on an online sportsbook. We have guides that examine spread bets, futures, and even parlays. Once you understand how those bets work, you can practice hedge betting.
Let’s say it’s playoff season, there is a match between the number one seed and the team ranked bottom. This situation is perfect for hedge betting, as the underdog will have exceptional odds. The moneyline bet for some underdogs has stretched as high as +750, giving you over seven times your original stake. If you placed a $50 bet at these odds, you could win $375 in profit.
This wager would be fantastic if it came true, especially if you staked over $50. However, given how unlikely this bet is, how can you mitigate the risk? Well, this is where the hedge bet comes into play. You can bet on the favorite to win the game. As long as this second wager returns at least the value of your first stake, you will avoid making a loss. The ideal hedge bet will give you profit no matter what team wins.
How does Hedge Betting Work?
Some of you might wonder, why not do this all the time? Well, the tricky part of hedge betting is making it worthwhile. If you choose a sporting event to hedge where you put hundreds on the line and only walk away with $10 worth of profit, then the bet was not worth placing. Instead, you need a situation where two bets on a sporting event both give you some profit.
Hedge betting works by placing a wager with large returns and a second bet that contradicts the first. The more you wager on the underdogs, the more you will have to spend on the favorites. The second bet aims to earn at least the value of the first stake in profit, or it won't be worth your time to bet.
If you spend $100 on your first bet trying to win $1,000, your second bet needs to return $100 or more. To earn this $100, you might need to wager a large amount, say, $250. If the original wager wins, they will give you $1,000 plus your stake. If the hedge bet comes true, you get the $100 profit plus the 250-dollar stake. Either way, you cannot lose money.
How to Win Hedge Bets
Winning a sports bet is never easy. Hedge betting is a unique opportunity to mitigate the risk of specific bets. The aim is to cover your losses, but you can also make a profit if you bet the right amount. If there are multiple outcomes for a sports event, it will decrease the chance of your hedge bet succeeding. For a hedge bet to work, there can be no outcome you have not bet on.
If the sporting event you bet on has overtime, your bets need to account for this event. Some sports, like soccer, allow each team to win or for the contest to end in a tie. If you make hedge bets, you need to account for these outcomes. It would be worth your time to look for other types of wagers, as each bet will eat into your profits and drive up your stakes.
For hedge bets to be worthwhile, you must spend a lot. If you want to, you can make these types of wagers with smaller amounts, but you will not come away with much profit. The hedge bet only comes into play when you make a risky bet with significant returns. Betting small is probably not worth the risk.
When to Make a Hedge Bet
If you want to hedge your bets, spend a lot of time researching. Not only do you need to find two wagers, but they need to payout in the exact opposite circumstances. If you bet on the Celtics to win the NBA Finals, the second bet has to be for the Warriors instead.
Once you have found your wagers, add them to the bet slip and adjust your stake. This is where you need to find the balance between risk and reward. The best hedge bet is in the Goldilocks zone, where one wager has high returns from a low stake, and the other covers all losses. In situations where it costs thousands, you are better off not placing a hedge bet.
That means it is only worth hedge betting when the time is right. Placing small wagers will ensure that whatever you win will be minimal. Even if you spend thousands of dollars, you are still not guaranteed to come away with lots of profit. Hedge betting is not your solution to sports betting but a tool to use in specific situations.
Some Hedge Betting Examples
Hedge betting is easiest to understand once you see some examples. You can use hedge bets in almost any sport. You need to find the right wagers and bet the right amounts. Remember, you don’t have to cover every part of your stake. You can use a hedge bet to reduce your losses. Below are just a few examples of how you could hedge a sports bet.
NFL Hedge Betting Example
The most popular time players look towards hedging their bets is the Super Bowl. This one-off game provides players with the perfect opportunity to win some cash. If we use the 2022 Super Bowl as an example, the Rams were the clear favorite over the Bengals. However, most straight bets on the underdog were only worth +200. Betting a hundred dollars would have seen $200 in profit plus your stake back.
If you wanted to hedge your bet, the moneyline for the Rams was -175. Staking $100 on this bet, you would only win $57.14 if your hedge bet came true. If you do the math, you spent $200 across two bets and can either make $50 or $200. This hedge bet is not worth placing. To make an effective hedge bet, you need to adjust your stake for the original wager or find a different bet.
NBA Hedge Bet
NBA hedge betting is like the NFL, as the most popular wager comes around the NBA finals. During the playoffs, there are often upsets between the first round and the last game. This is the ideal scenario for a bettor, as you want the underdogs to win. When you place a hedge bet, you want to cover losses in case the favorite wins. But usually, the best returns come when the unexpected result comes through.
If we look at some of the best NBA teams of all time, some lost to true underdogs. Looking at the Dallas Mavericks' 06/07 seasons, they were unstoppable in the league. They won 67 games and only lost 15 all season. When the playoffs began, they were the number one-seeded team against the team ranked eighth. The Mavericks lost to the Warriors and went down in history for it. Betting on an event like this would have certainly been for the hedge bet.
Given how unlikely an upset is, a straight-up bet on the underdog is often based more on hope than reality. Especially since that was only the third time in NBA history that number one crashed out in the first round to the bottom seed. That's what makes a hedge bet so great. It allows you to win big and to prepare if the upset does not come true. Either way, you will still have a winning bet, just one worth more than the other.
Hedge Betting Odds
The most important factor when considering hedge betting is the odds. Above, we give an example of the underdogs at +200 for the Super Bowl. Realistically, this is not the type of wager to look at for a hedge bet. It is just not risky enough and does not have the returns. Ideally, where you can five times your bet or more is the type of wager that would suit a hedge bet.
The entire point of a hedge bet is to reduce risk, and a wager worth +200 or less is not worth it. The returns are what should motivate you to limit your losses. Let’s say there is a wager with +1000. Putting a hedge bet against this wager is a good idea, as you can stake very little and still win a large sum. Bet $100 at these odds would see $1,000 in profit, so you would only need to find a wager where you could win $100 or more to cover your first bet. That way, whatever happens, you come out on top.
Sports Betting Hedge Calculator
If you are new to hedge betting, start with a calculator. If you look for a hedge betting calculator, you can put in the amount you want to spend and the odds. It will tell you how much you need to wager to cover your losses and how much profit you can end up with. You can do this calculation yourself in the bet slip, but online calculators make life easier.
Let’s say you found a bet worth +1000. You intend on betting $100 on it. But, the hedge bet has odds of -175. How much would you need to spend to cover your losses? If you bet $700 on the second, and it won, you could get around $400 in profit. Once you minus the $100 from the original wager, you would make $300. If the first bet comes true, you would make $1,000 minus the $700 you spent on the second wager. Whatever happens, you walk away $300 richer!
Hedging Your Bets Meaning
Hedging your bet is when you place multiple bets that contradict each other. If you bet on the Yankees to win against the Mets, a hedge bet would then involve wagering on the Mets to win as well. You would not make this bet unless the odds allowed a profit if either team wins. The caveat of hedge betting is that you win less if your bet comes true. If you bet on the underdog to win, and they do, your hedge bet reduces the profit. The point is to reduce the risk of betting on the underdog.
Hedging your bet is not something everyone looks into. Some of you might decide to risk a small amount on an underdog bet and will leave it at that. For example, if a team winning has exceptionally high odds, then placing a $10 bet and seeing it turn into $300 is a risk worth taking. You can also hedge your bet by placing a wager on the favorite. Betting $250 to cover just $10 means losing most of your profit. Only wagers with appropriate odds make hedge betting worthwhile.
Best Online Sports Betting Sites for Hedge Betting
Hedge betting is something you can do at any online sports betting site. Join a sportsbook and add wagers to your bet slip. You can adjust your stake and choose wisely for your bet. If you need help calculating the perfect hedge bet, then you should look for a hedge betting calculator.
Depending on the state you live in, there are different sportsbooks available. The most popular sportsbooks in America include DraftKings, FanDuel, and PointsBet. You could make hedge bets on any of these sports betting sites. If you are unsure what services are available in your state, check our betting guides. You will find breakdowns for each state, including the best sports betting sites in New York, Pennsylvania, and New Jersey.
Hedge Betting Summary
If you want a summary, hedge betting involves placing multiple wagers on a sporting event hoping to cover your losses. If you bet $200 for the underdog to win, you can place a bet on the favorite, which should make at least $200 in profit to cover your losses. Everything on top of that is profit. For this bet to be effective, find the perfect wager, stake the correct amount, and wait. It’s up to you to decide when it’s worth hedging your bet or when you should just let it ride.