Hedging A Bet: What It Means, How To Do It, and When It Makes Sense

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In sports betting, the ultimate goal is to win money by predicting the outcome of sporting events. To do that, bettors sometimes need to consider the act of hedging a bet, to ensure profitability in the betting markets. Let’s look at what hedging is, how to do it, and everything else that bettors should know about this practice that could benefit their bankrolls in the long run.

What is hedging?

Hedging a bet is the act of placing a bet that is on the opposite side of the one that you had originally placed on a sporting event. On the surface, this can sound incredibly counterintuitive, but the goal is to either guarantee a profit or at least ensure that a bettor will not lose money on an event, regardless of its outcome.

This can be done using multiple bet types, or by using multiple sportsbooks. For example, a bettor can hedge a futures wager on a team they bet on to win the Super Bowl months ago by betting on their opponent to beat them in the Super Bowl should the original team make the big game. Or, a bettor can place a single-game bet on a team to win a matchup, then hedge by betting on the other side with an in-game bet. Either way, a bettor can protect themselves against losing the funds from their original bet, while often guaranteeing a profit.

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Example of hedging a bet

As an example of hedging a bet, let’s say that a bettor has wagered $100 on a team to win the Super Bowl at odds of +1000 at the start of the NFL season. If that bet were to win, the bettor would earn a profit of $1,000 at those odds. But if that bettor wanted to hedge their bet, there would be multiple ways that they could do so.

Bet for and against the same team

The first way they could hedge is to simply bet against the team they had a futures ticket on in the Super Bowl. If the odds for their opponent were listed at +120 to win, a bettor could then put $100 on the opposing team to win. That way, if the original subject of the futures bet were to win, the bettor would turn a $900 profit ($1,000 futures win – $100 hedge loss). And if their opponent were to win, they would turn a profit of $20 ($120 hedge win – $100 futures loss).

Hedge a bet via the point spread

There would also be a way to hedge so that both bets could win in this scenario by using the point spread market to hedge. If the opponent of the bettor’s futures wager was a three-point underdog going into the game, the bettor could wager $110 to win $100 on that opponent against the spread. 

That way, if the subject of the original futures wager won by one or two points, both bets would win for a profit of $1,100. If the team that was used to hedge the bet won the game outright, the bettor would break even by losing their original $100 futures bet but winning $100 on their hedge bet. And if the team originally wagered on in the futures market were to win and cover the spread, the bettor would make $890 by winning $1,000 on their futures bet and losing $110 on their point spread hedge.

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How do I hedge a bet at DraftKings Sportsbook?

To hedge a bet at DraftKings Sportsbook, a bettor must first place an original bet. This can come in the form of a futures bet, a single-game bet, or even a parlay bet. As long as there is an original wager whose outcome can be hedged against as things progress, that is all that is needed.

The next step is to constantly monitor the odds for the original bet that was made. This will allow the bettor to identify opportunities for hedging as the start of a game approaches, and even after a game has already started. This primarily applies to single-leg bets, but can also be done going into the final leg of a parlay or in the late stages of a futures bet.

Once an opportunity to hedge has been identified, either guaranteeing a break-even scenario or a profit will be turned, a bettor will then place their bet on the opposite side of their original prediction. This is typically done by placing a point spread or moneyline bet on the opposite side of whichever outcome is needed for the original wager to win. 

It is up to the bettor whether they wish to hedge to simply guarantee that they break even across both bets, or to guarantee that they turn a profit no matter what, with the amount risked on the hedge deciding which of those options is in play.

When should I hedge a bet?

When to hedge a bet depends on the preferences and aims of each person. Some bettors have the goal of simply turning a profit when betting no matter what. In that case, they would likely want to hedge as many bets as possible to lock in profits on the events bet on.

However, there are also bettors whose goal will be to make as much money as they can. Those bettors may not feel that it is necessary to hedge, as they are confident in their original selections. They may also feel that hedging can eat into their potential profits should their original bet come through for them, even if hedging would guarantee that they would walk away with at least the amount they started with.

There are also some bettors who believe that hedges only belong in their garden. That is to say, some people won’t ever hedge their bets. Whether that is due to confidence in their original wagers or the desire not to shrink any potential winnings, some bettors simply do not consider hedging to be a part of their betting strategy, which is a strategy in and of itself.

Houston Astros second baseman Jose Altuve (27) reacts after being thrown out in the eighth inning against the New York Yankees during game four of the ALCS for the 2022 MLB Playoffs at Yankee Stadium.
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How much should I hedge for?

One of the most common questions pertaining to hedging is how much to hedge a bet for when the time comes. There is no one size fits all answer to this question, as the amount to hedge for often depends on the odds for the scenario, along with the monetary goals of each bettor. The first question a bettor must answer when deciding how much to hedge is what their goal is in the first place.

For example, some bettors may simply want to hedge to cover the risk amount of their first bet, to guarantee that they at least break even. Others may instead wish to guarantee that they turn a small profit on either outcome of a hedging scenario, without guaranteeing that they make the same amount on both outcomes. And some bettors may choose to guarantee that they win the same amount with either outcome.

In any of those scenarios, bettors can quickly calculate the hedge amount needed to achieve those goals. To do this, they can write out what they stand to gain and lose from their original bet, and enter their potential hedge amount into their preferred sportsbook without locking their bet in. That sportsbook will show the potential payout for the hedge, allowing bettors to adjust their amount until they see a number that aligns with their goal, at which point they can confirm their wager.

Should I hedge my parlay?

Bettors may find themselves in a spot where they have placed a parlay bet and are wondering if they should hedge to guarantee themselves a profit. This once again depends on a number of variables. The first is the amount risked on the original parlay, as a bettor may be less likely to hedge a parlay where they wagered $5 compared to one where they risked $100. 

The other major variable is the potential payout for that parlay based on its odds. For example, a bettor may not feel compelled to hedge on a three-team parlay that could turn $10 into $60. But a 10-team parlay that could turn $10 into $7,200 could be worthy of a hedge that would guarantee a profit of thousands no matter what, assuming that parlay survives until the final leg.

As a whole, hedging may not be a strategy that appeals to every sports bettor. But knowing how to do it and when it can be done will at least give bettors the option to utilize it to their benefit should the opportunity present itself.

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