What Does Hedge Your Bets Mean in Gambling? Simple Explanation -

“Hedge your bets” is a common term used in gambling and finance. It means reducing risk and sometimes guaranteeing a profit.

This can be done by betting on different outcomes so that you secure a profitable outcome no matter what happens.

In today’s article, we will cover:

What does it mean to hedge your bets?
Why you would want to hedge your bets?
The best hedging calculators you can find online!

Hedging Your Bets!

There will often be times in betting when you want to hedge your bets. Either to reduce your current liability or to lock in a profit no matter the outcome (If the odds have shortened in your favour)

It is common for bettors who like to back high odds bets, to hedge these bets for a profit when the odds are in their favour. Hedging your bets is very easy to do.

There are even calculators to help you figure out how much to bet.

A Hedge Betting Example…

Let’s take a look at the outright betting market for the Premier League season 2024/2025!

Man City and Arsenal are the obvious favourites at the start of this season, with both teams being at similar odds. Outside of these two teams however, there are some big odds. If any of these teams were to get off to good start and for example win their first five games. The odds would shorten significantly!

Especially if it was a team that was well-backed globally:

Man Utd at odds of 25.00
Newcastle at odds of 42.00

Both look appealing odds and have made some good moves in the market this summer. For the sake of this example let’s say that we put £10 on Newcastle at odds of 42.00.

Our position looks like this at the start of the season. If Newcastle however went on to win the first five games of the season and moved into odds of 18.00, this would enable us to hedge our position.

This would give us the following options:

Reduce liability
Remove all liability
Guarantee a profit by hedging across all outcomes

In the image above we went with a hybrid approach. Locking in a guaranteed profit however leaving more money to be won should Newcastle win the Premier League, if the odds continued to shorten again you hedge more across the other outcomes.

This was done by laying Newcastle (betting against them to win) at odds of 17.00 for a stake of £20.

If you are a sports bettor or trader who likes to take high odds, learning to hedge your bets is a great strategy. That greatly reduces the usual volatility that you get with backing higher odds selections.

How to Calculate a Hedge Bets Stake:

The formula to calculate the stake for hedging a bet is relatively simple, it goes like this:

Determine the potential payout of your original bet if it should win.
Find the odds of the opposite outcome.
Divide the potential payout of the original bet by the odds available on the second bet.

This result is the recommended stake for the hedge bet on the alternate outcome.

Hedging bets on the exchanges

When it comes to hedging bets on the betting exchanges it is extremely simple. This is because you can place lay bets. Lay bets involve taking on liability should a selection win (basically acting as a bookmaker).

If you can back odds and lay them at lower odds, then you have a profitable hedge bet. The same can be said for laying odds at lower odds then you can back them.

Best Hedging Calculators Online

When it comes to hedging a selection that you have made with an online bookmaker, you may want to use an online hedging calculator to help with your calculations.

Here are some of the best hedging calculators online:

Conclusion

Learning to hedge your bets properly is a crucial strategy to have under your belt if you want to bet successfully. It can enable you to take multiple high odds selections before an event starts with the intention of hedging your bets should the odds drop.

This is extremely useful for markets such as:

Golf Tournaments
World Cup and Euros
Tournament Outright Markets
Player Outright Markets

Additionally, if you’re manually trading on sports or arbitrage betting, then being able to hedge your bets most effectively is a key component to building your profits!