What is Hedging in Sports Betting?
How & When to Hedge On Live Sports
Hedging in sports betting is a strategic approach used by bettors to ensure a guaranteed profit or minimize potential losses from a wager, regardless of the event's outcome. This strategy involves placing additional bets on different outcomes than the initial wager when circumstances change or to lock in profits as odds shift.
The Role of Hedging
Primarily, hedging is about risk management. It becomes particularly useful in scenarios where the bettor’s confidence in the initial outcome diminishes due to changes during the event, or when securing a sure profit becomes possible due to favorable changes in the betting odds.
Live Betting and Hedging
Live betting, or in-play betting, offers unique opportunities for hedging because it allows bettors to react in real time as the game unfolds. This dynamic nature of live betting means that odds are continuously updated throughout the game, providing strategic points at which one might place hedge bets.
Examples of Hedging with Live Betting
1. Hockey: Imagine placing a pre-game bet on the Boston Bruins to win against the Toronto Maple Leafs at odds of +200. As the game progresses, the Bruins take a commanding lead, causing their live odds to shift to -150. To hedge, you might place a live bet on the Maple Leafs, now at +180. If the Bruins maintain their lead, you profit from your original bet, but if the Maple Leafs make a comeback, your hedge bet covers some or all of your initial wager.
2. American Football: Suppose you’ve bet on the New England Patriots at +150 to beat the Miami Dolphins. Towards the end of the game, the Patriots hold a slight lead, but their odds have shifted to -110 due to the closeness of the score. You decide to hedge by betting on the Dolphins at +130. This way, if the Patriots’ lead holds, you gain from your initial bet, but if the Dolphins pull off a late-game comeback, your hedge bet minimizes your losses.
When to Consider Hedging
Hedging can be considered when:
The initial conditions under which you placed your bet have significantly changed
There’s an opportunity to lock in profits due to shifts in odds. - You wish to reduce potential losses as the game's outcome becomes less predictable
Example: You bet $100 on the underdog team at +300 odds in a college football game. By the third quarter, they are surprisingly ahead, but the favorite team is known for strong comebacks. The live odds for your team drop to +150, and the odds for the favorite shift to +200. At this point, you could place a $150 bet on the favorite. If the underdog’s lead holds, you still earn a good profit from your initial bet, but if the favorite makes a comeback, your hedge bet limits your overall loss.
Hedging Tools
Tools such as Pinnacle’s Hedging Calculator, will tell you if there is an Hedging opportunity — just enter the odds and stake of your original bet and the odds for the alternative outcome.
Final Thoughts
Hedging in sports betting is a nuanced tool that balances risk against potential reward. By understanding and reacting to shifts in live betting odds, bettors can protect their stakes and take advantage of the evolving dynamics of the games they wager on. Effective hedging requires staying alert, understanding how odds work, and being able to perceive possible changes in the game's momentum.