Hedge Betting Expained: The Art of Locking in Profit

Hedge Betting is a method of risk management in sports betting that requires the placing of an additional wager on a different outcome of the original bet. The aim of a hedge bet is to limit the risk of the original bet. This could mean guaranteeing a profit irrespective of the outcome of the event or minimizing a loss.

When and Why to Hedge Bet

Hedge betting is an important element of betting strategy. Hedging in sports betting is widespread and there are three scenarios where it is commonly used.

1. Futures/Outright Bets: A bettor might back a team in a long-term market, perhaps to win a championship or a knockout competition. In the knockout competition scenario there would be an obvious opportunity to hedge the bet if the team reaches the final. In that instance, a bettor may choose to guarantee a profit by backing the opposing team in the final.
2. Accumulators: A bettor might have backed an accumulator and be waiting on the final leg for a successful outcome. In this instance, it could be sensible to hedge the final leg of the accumulator to guarantee a return and avoid disappointment. This would be a way of reducing risk, although it does reduce the overall winnings.
3. Live betting: During a live event a bettor may wish to hedge the original bet after seeing the circumstances change in the contest. This could be a way of limiting a potential loss, if the team had been reduced to ten men, or perhaps locking in a profit if the team has gone ahead in the contest.

How to Calculate the Hedge Stake

Imagine you have placed a £10 bet on England to win the 2026 World Cup at 11/1. They have reached the final against Spain and have shortened to 1/2 to lift the trophy and are therefore 2/1 to fail.

If the aim is to guarantee the same profit whatever happens, this is how you would do it.

The original bet on England is a £10 wager, which would generate a return of £120 and a profit of £110. 

Ensuring the same profit in both scenarios would mean placing a £40 bet on Spain at 2/1.

If England win, there is a £110 profit on the first bet and a £40 loss on the hedging bet on Spain meaning a total profit of £70.

If Spain win, there would be a £10 loss on the England bet and an £80 profit on the Spain bet meaning a total profit of £70.

How to Place a Hedge Bet

Firstly identify the market where the original wager has been placed and then work out the required stake to place the hedge. This stake would depend on what the hedge intends to achieve, maybe simply reducing the downside risk of the original bet, or perhaps attempting to secure the same profit whatever the outcome. Then simply place the opposing bet. This could be with a different bookmaker or exchange to ensure the best possible value.

Hedge Betting vs. Cash Out

Bookmaker's ‘Cash Out’ feature offers a simpler way of hedging a bet without working out the amounts needed to bet on the other side of the event. However, the cash-out option usually means a reduced profit or perhaps an increased loss (depending on the state of the market) because it often includes a significant margin in favour of the bookmaker.

Strategic Considerations for Hedging

To be successful at hedging it helps to have accounts with multiple bookmakers. This could involve matching a bet on an exchange or placing it with a fixed-odds bookmaker. 

Having more options to place the hedging bet should improve the value as there will be a wider range of odds available.

Sometimes the aim of the hedge will be to secure a guaranteed profit and other times it will be done to limit a potential loss.

It all depends on whether the odds of the outcome you have backed has lengthened or shortened since the moment the original wager was placed.

During an in-play event, it helps to be quick.

If you notice a key player on the team you have backed has suffered an injury, it could be sensible to execute the hedge before that player is substituted. If you are too slow, your team’s odds are likely to have increased.