When to Hedge

Just about everyone is familiar with the concept of the hedge bet. In fact, this has becoming such a common idea that it’s often used outside of betting as well, when people talk about “hedging their bets” to reduce risk. In sports betting, there are chances to hedge all the time, especially when we have a long shot future bet that has come close to winning a league title, tournament, or other such competition. We can bet heavily on their opponent, knowing that if they win, we will still come out way ahead, but if they lose, we’ve just won a much larger bet than we originally risked. Sure, no matter what happens, we can’t win the full value of our original long shot; but perhaps more importantly to us, we’ll win something in every scenario.

Almost everyone is risk-averse to some level or another, which is what makes hedging bets attractive. This leads to a question that every person who wants to win at sports betting asks at some time or another: when should I hedge?

The correct answer is: almost never.

This may come to a surprise to some bettors, who think that locking in a small profit is more important than taking a risk, no matter what the potential profits. But it’s important to remember what the goal of sports betting is: you want to make as many bets with a positive expectation as possible, so that you’ll come out ahead in the long run – not to come out ahead on any single bet. If you’re making a random bet simply to hedge against the possibility of losing another bet, chances are that you’re making a gamble that the house has an advantage on. After all, the house has an edge on every single random bet you make – that’s why they’re still in business! So when we hedge for the sake of hedging, we’re not helping ourselves, we’re just helping the bookmaker.

The key problem with hedging is that you will almost always have a huge advantage on your long shot bet by the time you’re ready to hedge. If you’ve bet on a team to win their sport’s championship at 200-1 and they’ve made the finals, most of the work has already been done; they’re certainly not a 200-1 underdog in the final game or series! Unless you think the odds on that final matchup are so far off that you’ll gain value by betting on the opposite team, hedging simply won’t pay off in the long run. We win at sports betting by taking edges, not giving them to the casino.

There’s one other spot where hedging is not only acceptable, but probably the correct decision. This happens when we’re talking about life changing sums of money. Let’s take that 200-1 bet we were just talking about: what if you had originally bet $250, and now stood to win $50,000 – enough to pay off your student loans or put a down payment on that house you’ve been eying? In that case, you’d be crazy not to hedge. Taking the other side to lock in a huge profit that could change your life forever shouldn’t be looked down on – it’s the only responsible thing to do.