In the multifaceted world of sports betting, understanding the many different strategies can provide a significant edge. One such strategy that bettors should become familiar with is ‘hedging'. This blog post from HOFBets will shed light on this term, its impact on betting sports, and how it can influence your picks and parlays, whether it be for the NFL, NBA, MLB, or more.

What is Hedging in Sports Betting?

You probably have heard the term ‘hedging your bets’ before. In normal life, this typically refers to doing some opposite action in the likelihood of something not going as expected. In sports betting, ‘hedging' refers to the act of placing a new wager on an opposing outcome to an original bet to either ensure a profit or lessen potential losses. This strategy is widely used across different types of bets, including same game parlays, player props and game lines.

Hedging can be particularly useful when you've placed a futures bet or a parlay and the outcome is looking favorable, but you want to ensure a return should the tides turn. When you have come close enough to one of these bets hitting, hedging can be an excellent way of guaranteeing a profit, or in many other cases, it can be an excellent method for minimizing any loss.

An Example of Hedging with Futures:

Let’s look at an upcoming example of NFL Futures odds to get some insight into what a proper hedging strategy could look like.

Let’s say you selected the Kansas City Chiefs as Super Bowl Champions at odds of +600 and put down a $100 wager. Now moving into the future, let’s assume that the Chiefs have advanced to the Super Bowl and are facing off against the San Francisco 49ers. Further let’s say that the moneyline odds for the game are the following:

Kansas City Chiefs: -150

San Francisco 49ers: +130

If the Chiefs were to win, you would receive a payout of $600 of straight profit. If you were to wager approximately $77.70 on the 49ers at these odds, your payout would be roughly $100, equivalent to your initial stake on the Chiefs. Under these circumstances, you would completely erase the possibility of losing any money, however, you would win nothing in the case that the 49ers won.

This would theoretically be the profit-maximizing strategy, however, one may prefer to take a more mixed approach that guarantees a profit either way. If one were to place a $200 wager on the 49ers, this would give you a return of $460 including your stake. In this case, you would win $700 on the Chiefs, but forfeit the $200 you hedged on the 49ers, and likewise, if the 9ers won, you would forfeit the $100 that was placed on the Chiefs. But with respect to profit, this gives you either a $400 win on the Chiefs or a $160 profit on the 49ers!

I don’t know about you, but I love knowing I am going to win either way!

There are an infinite number of different mixed strategies you can apply, but theoretically you would want it to match what you anticipate the true likelihoods of either outcome are.

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An Example with a Parlay:

Let’s illustrate one more example of how hedging can be useful for multiple types of betting. Let’s say that we have selected the following MLB parlay that has combined odds of +359:

Further, let’s say that the first two legs of the parlay have hit, leaving us with just the game between the Dodgers and the Blue Jays. We have placed a $20 wager on the entire parlay and the odds for the final game are:

Dodgers: -140

Blue Jays: +120

If the Dodgers win, we are poised to win $70.80, but if the Blue Jays win, you would leave with nothing. If we were to place an opposite wager for the Blue Jays to win for $30, this could nullify our chances of losing any money.

Your profit for the total parlay would be reduced, but in this case you would stand to win $40.80 (the original profit minus your new wager) if the Dodgers win and $15 if the Blue Jays won (a profit of $35 minus your original stake on the parlay).

The Impact of Hedging:

Hedging can add a safety net to sports betting. It allows bettors to manage their risk and lock in profits before an event concludes. By implementing hedging in your sports betting analytics, you might increase your chances of having a profitable outcome.

Strategies to Hedge Bets:

While hedging can be a useful tool, it's essential to use it strategically:

• Timing: The timing of your hedge bet is crucial. The aim is to get the maximum value from your initial bet before placing the hedge. This is particularly crucial if you are looking at live betting, as these odds can shift dramatically, not to mention rather fast.
• Analyzing Odds: Ensure that the odds of your hedge bet provide enough value to guarantee profit or reduce losses significantly. Statistical software can be crucial in determining things such as these, as can learning a better understanding of how odds work in sports betting. Check out our article on American Odds here.
• Risk Tolerance: Consider your risk tolerance before hedging a bet. If you're more comfortable with risk and believe in the outcome, you might decide not to hedge. Furthermore, a better understanding of your risk tolerance when hedging can guide you in developing your proper hedging strategy when there is an opportunity for different balances between one outcome or the other.

Conclusion:

Hedging is a strategic move that can transform your sports betting experience, helping to secure profits and manage losses. It is an essential tool to have in your betting arsenal, whether for MLB prediction picks and parlay, player props, or finding the best parlay for today.

Stay tuned for more insightful posts as we continue to unravel the world of sports betting terminologies. If you found this post helpful, don't forget to share it with fellow bettors. Happy betting!

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All odds in this article are from DraftKings Sportsbook.