What Is Hedging A Bet
Hedging is betting on both sides of an event to ensure you make a profit, regardless of the outcome. Say you took a futures bet and picked the Andy Murray to win the Australian Open at a price of 9.00 at the start of the tournament. You put down 100 on Murray, which turned out to be a smart bet! Hedging Your Bet? Everything You Need To Know About Hedge Funds. By Karen Doyle March 3, 2021 ©Shutterstock.com. A hedge fund is an investment vehicle in which.
Hedging is betting on both sides of an event to ensure you make a profit, regardless of the outcome.
Say you took a futures bet and picked the Andy Murray to win the Australian Open at a price of 9.00 at the start of the tournament. You put down 100 on Murray, which turned out to be a smart bet! Murray is in the final against Djokovic with the following prices:
Djokovic – 1.40
Murray – 3.00
If Murray wins, you are golden! You come out ahead 800! However, Murray is still a steep underdog, so you may prefer to hedge your bet and guarantee a profit.
To hedge your bet, you place a bet on Djokovic which will cover your stake that you made on Murray at the start of the open. Say you bet 300 on Djokovic, so in total you are out 400:
300 on Djokovic
100 on Murray
If Murray wins you get 900, less the 400 you bet for a profit of 500
If Djokovic wins you get 420, less the 400 you risked for a guaranteed profit of 20
As you can see, you still win big if Murray pulls off the upset, but you are covered in case he doesn’t!
To see how to calculate how much you should bet to win the maximum amount no matter what on a hedge, check out our hedging formulas or, skip the math and use our simple hedge calculator.
Should I Hedge My Bets?
It depends. Statistically, no, you should not. Each time you place a bet you pay the oddsmaker’s margin, cutting into your profits every time you hedge. However, if you stand to make a great profit and are risk averse, hedge away!
It’s likely that you’ve used the phrase “hedging your bets” at some point in your life. At the very least you’ve surely heard the phrase before, or some version of it. This is a widely used phrase, and not just in the context of sports betting. People use it in all kinds of situations, usually to refer to the act of playing it safe or mitigating risk in some way.
For example, let’s say we were about to go on an unexpected trip overseas. We didn’t know what the weather was going to be like, so we decided to pack winter clothes AND summer clothes. This would be a clear case of “hedging our bets”.
What Is Hedging A Bet
There are countless other examples of how people hedge their bets in various aspects of their life. This article is all about how hedging works in sports betting though. We believe that the hedging technique is a very powerful strategy in certain situations, so we want you to learn how to use it.
What Is Hedging A Bet Analysis
Below we teach you everything you need to know about hedging. We start with a brief explanation of the technique and clear up a common misconception about hedging. We then talk about when and why the technique should be used, using examples to demonstrate.