What is Hedging in Sports Betting?

Lots of people like to talk about “hedging their bets,” but how familiar are you with hedging and how it actually works?  Hedging is a strategy where you bet on both sides of a game or a match.  Some people incorporate hedging strategies before things start going south, while others may only fall back on hedging if they believe they are about to lose a bet they have already placed.  Used properly, hedging can reduce or even eliminate your risk on a bet.  Done incorrectly, it can cost you money.

Let’s look at an example of hedging.  Say you are betting on the Bears to win against the Buccaneers.  Starting out, you feel confident in your wager.  But as the game progresses, the Bears aren’t doing so well.  Suddenly it starts looking as if the Buccaneers may win the game after all.  At this point, you could hedge your bet by placing a wager on the Buccaneers. 

Depending on how much you bet, you could have a few different outcomes.  You could bet the same amount of money on the Buccaneers as you placed on your original wager on the Bears.  If you do that, you wouldn’t break even if the Bears won, because you would still have to pay up on the juice.  What if you bet less on the Buccaneers than you did on the Bears?  At that point, it is a partial hedge.  The smaller bet on the Buccaneers effectively reduces the size of your larger bet on the Bears.  You reduce your original risk exposure, but still are basically betting on the Bears.  And what if you decide to bet more on the Bucs than you did on the Bears?  At that point you have placed the equivalent of a small bet on the Buccaneers (unless you wager substantially more on the Bucs than you did on the Bears).  The original wager you placed on the Bears is counteracting it, which is why it essentially is smaller.

Why should you be wary about hedging?  When you first learn about hedging, you may think, “This is an easy way to keep my risk exposure low and always make money.”  A lot of people fall right into the pitfall of thinking that hedging is a foolproof strategy.  But this is where you should stop and think and ask yourself, “Okay, so why isn’t everyone doing this?”

Clearly, hedging has some serious drawbacks, and cannot be used all the time to profit.  You may actually be increasing your risk exposure when you hedge, and more significantly, you are actually eliminating your chances of winning your original bet in full.  This reduces your payouts, and if you hedge a lot, over time you will win less and less money even though you are still paying the juice.  This means you are actually reducing the value of your bets, which reduces your long-term profits.  Sharps who make it in the betting world focus on maximizing the value of their wagers, not decreasing the value of their wagers.

Hedging can be a handy tool to add to your sports betting toolbox, but it should be used strategically and sparingly.  Hedging is not a strategy to be employed on its own again and again in lieu of a more comprehensive technique.  You do that and you will ultimately eat into your bottom line, and may very well find that you are not profitable over the long run, even if you are in the short run.  Use hedging only when it is necessary and smart, and as one component in your overall betting strategy!