If you are new to sports betting, you might hear a lot of talk surrounding the hedge bet. But what exactly is hedge betting? Here at Bet Station, we give you the answers you need to make successful sports wagers. Our guide will tell you everything you need to know about hedge bets, and we have included 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 are putting your cash on the line, hoping to win more. Some of these wagers will return more than others, and some are quite unlikely. Say you wanted to bet on one of these risky events, but you did not 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. They are unsure if the original wager will come true, so they bet on the opposite outcome. They need to ensure the amount they hedge will win at least the stake of the first bet, plus some profit. Plus, they will also ensure that the second wager does not take up too much profit in case the original wager comes true. When they settle the bet, they will either win a lot from the original wager, or the hedge bet will save the day.
What is Hedge Betting?
To understand what hedge betting is, you also need to understand the various wagers you can place on any online sportsbook. We have detailed guides about spread bets, future bets, and even parlays here at Bet Station. Assuming you know what they are and how they work, a hedge bet is essentially no different.
Let’s say it’s playoff season and there is a match between the number one seed and the team ranked bottom. This situation is normally perfect for hedge betting, as the underdog will have exceptional odds. The moneyline bet for some underdogs has stretched as high as +750, which would give 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 more than $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 could now 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. You just need to bet the correct amounts.
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 several thousand 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 you place two bets on a sporting event and they both give you some profit.
Hedge betting works by placing one wager that has large returns and a second bet that contradicts the first. For the bet with large returns, you need to wager a reasonably small amount for the hedge to be effective. The more you wager here, the more you will have to spend on the favorites. The aim of the second bet is to earn at least the value of the first stake in profit, or it won't be worth your time to bet.
This may sound confusing, but when you do the math, it is very simple. If you spend $100 on your first bet trying to win $10,000, then your second bet needs to return $100 or more. To earn this $100, you might need to wager a large amount, say, $1,000. This works out as if the high-value bet wins, then you get $10,000 in profit, minus the $1,000 dollar second bet, giving you 9k profit. If the second bet wins, then you lose your $100 original stake and gain back the second bet, plus any profit.
How to Win Hedge Bets
One of the most difficult things to do in sports betting is winning. Hedge betting is your opportunity to reduce the risk, as you are aiming to cover your losses. For hedge betting to work, you need to bet on a sporting event where there are two outcomes. If your event has over two outcomes, then you will need to spend more to cover all possibilities. If you leave one possibility not covered, Murphy’s Law dictates your bet will fail.
If the sporting event you bet on has overtime, you need to ensure your bets will still count. Some sports, like soccer, give you the opportunity to bet on the winner of if the contest will be a draw. If you make hedge bets, you need to account for these outcomes. It would be worth your time looking 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 really 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 large returns. Then you make a safer bet which will return at least your stake and hopefully some profit. When all is done, you could either win big from the risky bet or win a little from the safe one.
When to Make a Hedge Bet
If you want to hedge your bets, you need to 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, then your second bet has to be for the Warriors to win instead.
Once you have found your wagers, add them to the bet slip and adjust your stake. You need to find that goldilocks zone where your first bet has huge returns from a small stake, and your big bet is worth placing as it does not eat all your profits. If it will cost you $2,500 to hedge your bet, and you can only win around $50 in profit, then it might not be worth hedging. With small returns, you are better off placing the bet outright and taking the risk of trying to win big.
That means it is only worth hedge betting when the time is right. You need the right wagers, on the right game, and you must bet a large sum. 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 just 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 just reduce your losses if your original wager fails. Below are just a few examples of how you could hedge a sports bet.
NFL Hedge Betting Example
One of the most popular times 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, if you were to make a moneyline bet, betting on the underdog was only worth +200. So a thousand-dollar bet would have seen $2,000 in profit, plus your stake back.
If you wanted to hedge your bet, the moneyline for the Rams was -175. This means if you staked $1,000 on this bet, you would only win $570 if your hedge bet came true. If you do the math, you staked $2,000 across two bets and only made $1,570 back; meaning this hedge bet was not effective. To make an effective hedge bet, you would either 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 are looking 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, there are a few that lost to some 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, and they were up against the team ranked eighth. The Mavericks lost to the Warriors, and they went down in history for it. Betting on an event like this would have certainly been for the hedge bet.
Given how unlikely a major upset is to come true, 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 rank one crashed out in the first round to the bottom seed. That's what makes a hedge bet so great. It gives you the chance to win big and allows you to prepare in the event 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 right returns. Ideally, anything 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 risky enough. 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. A $100 bet 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 off with a calculator. Not just any old calculator will do. If you look for a special hedge betting calculator, you can put in the amount you want to spend and the odds, and 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 and you intend on betting $100 on it. 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 bet, and it won, you could get around $400 in profit. Once you minus in 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. Hopefully, 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 type of bet unless the odds allowed for you to make 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, then your hedge bet just reduces the amount of profit you win. The point of this wager 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 not mind if it does not come true. 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. If you want to cover your $10 stake, you can then bet on the favorite. However, if you have to bet $100 on the favorite to cover your $10, then you will just eat into your profit. Hedge betting is only worth it if you bet big and only when there are wagers with appropriate odds.
Best Online Sports Betting Sites for Hedge Betting
Hedge betting is something you can do at any online sports betting site. Simply join a sportsbook and add wagers to your bet slip. You can adjust your stake and choose the right wagers 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 in each state. 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, be sure to check our betting guides. Here 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 is when you place multiple wagers on a sporting event hoping to cover your losses. If you bet $200 for the underdog to win, you can then 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, you need to find the perfect wager, stake the correct amount, and wait. Some sportsbooks will have different wagers at different amounts, so timing your bet is very important. It’s up to you to decide when it’s worth hedging your bet, or when you should just let it ride.