Hedging Bets and Managing Risk with Multiple Wagers

Understanding how to hedge your bets and manage risk can transform your betting strategy from a game of chance to a more calculated endeavor. 

Hedging allows you to guarantee a profit or minimize potential losses regardless of the outcome of an event.

If that sounds amazing, it’s because it is. 

This strategy involves placing multiple wagers on different outcomes to create a safety net around your investments. 

What is hedging in sports betting?

At its core, hedging is risk management in sports betting. This strategy involves placing bets on opposing outcomes to either lock in profits or reduce potential losses. 

It’s like buying insurance on your bet; you might not need it, but it’s there to protect you from a total loss. 

Of course, you won’t win as much; after all, you have to pay for insurance.

The Super Bowl Hedge

The best way to explain hedging is to use an example. Mixing some futures bets with live bets is a great way to hedge and probably the most common way.

Imagine you’ve bet $100 on the Kansas City Chiefs to win the Super Bowl at +500 odds early in the season. Of course, this is a futures bet.

As the season progresses, the Chiefs make it to the Super Bowl, and they’re playing against the Los Angeles Rams. Now, the odds for the Rams to win are +150. You’re faced with a dilemma; if the Chiefs win, you stand to gain $500, but if they lose, you lose your $100 stake.

Here’s where hedging comes into play.

You could place a hedge bet on the Rams to win. If you bet $200 on the Rams at +150 odds, you could ensure a profit regardless of the outcome.

If the Rams win, you win $300 from that bet but lose your original $100, netting a $200 profit. If the Chiefs win, you still get $500 but lose the $200 bet on the Rams, leaving you with a $300 profit.

Either way, you’re making money. You minimize the risk and shave a little bit off of your profit.

Advantages of Hedging

The primary advantage of hedging is that it reduces your risk. 

Sports events are unpredictable, and even a sure win can turn into a loss due to unexpected events, like injuries or weather changes. Hedging allows you to navigate this uncertainty more safely.

The disadvantage is that you’re not going to win as much in the end. 

As with all sports betting—

• More risk = more profit
• Less risk = less profit

It’s like teasers. Sure, it’s a parlay, but you can adjust the spread, which changes the odds and how much you make.

Reducing Potential Losses

Consider an instance where you’ve placed a futures bet on the Chicago Bulls to win the NBA Championship at the start of the season with +1000 odds, wagering $100. Realistically, the Bulls tend to hover around +80,000, but it’s fun to dream about them going back to the Finals again.

But we digress.

As the season nears its end, the Bulls have made it to the finals against the Los Angeles Lakers.

However, DeMar DeRozan of the Bulls is injured, and their chances of winning have diminished.

You could hedge by betting on the Lakers to win the championship. By carefully calculating the amount you wager on the Lakers, you can ensure that you either break even or lock in a small profit, regardless of the championship’s outcome.

Timing is Everything

The key to successful hedging is timing.

Odds fluctuate, and finding the right moment to place your hedge bet can significantly affect your profits.

Monitoring odds and acting quickly when you see an opportunity is crucial.

That’s why we have an odds comparison tool that tracks the current odds for all sporting events in real time. Our own sports betting experts don’t even place bets without checking the odds first.

Mid-Game Hedging

Futures are the most common bets to hedge, but you can also do it on a tighter timeline.

Let’s say you’ve bet $100 on the Miami Heat to beat the New York Knicks at -200 odds. The Heat are leading comfortably by halftime, and the live odds for the Knicks to win are now +400. 

You could place a $50 bet on the Knicks at these odds. If the Heat’s lead holds, you win $50 from your original bet but lose the $50 hedge, breaking even. 

If the Knicks make a comeback, you win $200 from the hedge but lose the $100 original bet, netting a $100 profit.

This mid-game hedging can effectively lock in profits or mitigate losses based on the game’s flow.

Hedging is a Balanced Approach

Hedging your bets in sports betting is a strategy that requires balance.

It’s not all about eliminating risk completely but managing it to align with your betting goals and risk tolerance.

By understanding the dynamics of the games, the odds, and the timing, you can use hedging to make more informed and potentially profitable betting decisions.

The key to successful sports betting hedged or not, lies in disciplined bankroll management, thorough research, and a clear strategy. 

We don’t necessarily recommend hedging for the casual bettor because it does take an active approach and some calculating. That’s not to say you have to be a pro. However, you just have to be in tune with the game and the numbers.

Whether you’re a seasoned bettor or new to the scene, incorporating hedging into your betting toolkit can help you navigate the unpredictable waves of sports betting with a bit more confidence and control.