Hedging Sports Bets: How And When To Hedge Your Bet

Hedging is one of the most hotly contested topics in sports betting. Full-blown debates are common among bettors over whether it’s a viable strategy.

Conceptually, hedging is simple. It involves placing a bet on the opposite side of an existing wager after the odds on the existing bet have shifted. Hedging is a risk management strategy bettors use to either lock in a guaranteed profit or soften a loss.

Knowing when to hedge a bet, if you even should, how much to hedge, and the math behind hedging is a bit more complicated. As sports betting options expand, so too have the number of potential hedging opportunities. BettingUSA tackles the tough questions regarding hedging in this guide.

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Hedge Betting: A Simple Example

The best way to illustrate how hedging works is through a simple example. Imagine that before the current NFL season, a bettor had placed a $100 wager on the Buffalo Bills to win the AFC Championship at +700.

By luck and skill, the Bills weave their way to a divisional title, win their first two playoff games, and are now facing the tough Kansas City Chiefs at Arrowhead Stadium. The odds on the Bills to win the game and the AFC crown are +200. The Chiefs are -240 favorites.

At this point, the bettor has a decision: let it ride on the Bills for the chance to win $800 or mitigate risk by placing a hedge bet on the Chiefs moneyline. The bettor decides to take the cautious route and hedge but isn’t sure how much to bet on KC. Let’s consider a couple of scenarios.

Scenario #1: Bettor hedges $50 on KC at -240

• The Bills win: The bettor profits $700 on the Bills and loses the $50 stake on Kansas City for a net profit of $650.
• The Bills lose: The bettor loses $100 on the Bills but wins $20.83 on the Chiefs for a net profit of -$79.17.

Well, that isn’t much of a hedge. The bettor realizes that to recoup the original $100 bet (if the Bills lose), the payout on Kansas City must be at least $100. At -240 odds, bettors risk $240 to win $100. So, the bettor must risk more than that to guarantee a profit. $400 seems like a reasonable figure.

Scenario #2: Bettor hedges $400 on KC at -240

• The Bills win: The bettor profits $700 on the Bills and loses $400 on Kansas City for a net profit of $300.
• The Bills lose: The bettor loses $100 on the Bills but wins $166.67 on the Chiefs for a net profit of $67.67.

A Bills victory is still the ideal result in this scenario, but the bettor profits regardless.

The Impact of Shifting Odds

The above example illustrates an important point: The more the odds shift in favor of the original bet, the less the bettor must wager on the opposite side to guarantee profits.

Imagine instead that the Bills were -240 moneyline favorites and the Chiefs were +200 dogs. The bettor would only have to wager $50 on Kansas City to cover the original bet.

Scenario #3: Bettor hedges $50 on Kansas City at +200:

• The Bills win: The bettor profits $700 on the Bills and loses $50 on Kansas City for a net profit of $650.
• The Bills lose: The bettor loses $100 on the Bills and wins $100 on Kansas City to break even.

Any wager above $50 on Kansas City (within reason) would result in guaranteed profits, regardless of the winner.

Common Hedge Betting Scenarios

There is a multitude of situations where hedging might make sense. We examine a few of the most common ones.

Hedging a Futures Bet

Hedging against futures has always been popular, and for a good reason.

Futures are among the highest-risk, highest-reward wagers in sports betting. Even the best teams are often heavy underdogs to win conference championships or league titles. In a league of 32 teams, a 10% chance (+900) to win it all signifies an outstanding team. Conversely, a middle-of-the-pack team may kick off the season at +3,000 odds or longer.

Imagine sweating a Cinderella team at +4,000 odds for an entire season, only for them to lose the Championship game. That’s a daunting prospect for most bettors, which is why they’ll bet the other finalist to lock in meaty guaranteed profits.

Some bettors will even take this a step further and begin hedging in the semi-finals or divisional rounds. By then, the odds on their pick will have dropped enough that generating a profit regardless of the outcome won’t be difficult. They may not score the mammoth payday had they just let it ride, but they still stand to win a significant payout in any outcome.

Hedging a Multi-Leg Parlay

Big, multi-leg parlays have exploded in popularity due to their lottery-style appeal and a heavy marketing push by online sports betting operators. Rarely a day goes by when the airwaves aren’t flooded with stories of lucky bettors converting a few morsels into an Emperor’s feast.

Even more so than futures, big parlays are extremely risky propositions that usually result in players going bust but occasionally award life-changing payouts.

Bettors that hit all but one leg of a parlay win absolutely nothing. Hitting six out of seven legs generates the same profits as zero out of seven – zero.

The primary condition for hedging parlays is to win all the earlier legs. Order matters, which is why some bettors play it safe with the early games and save the longer shots for last.

As the final legs approach, hedging becomes a more viable and attractive option. Hedging against the last leg of a massive parlay will often guarantee hefty profits.

Imagine a parlay consisting of 6 NFL point spreads, all at -110 odds. Using FanDuel Sportsbook as an example, the payout on a $10 ticket consisting of six -110 NFL spreads is $474.13.

Now imagine the first five legs hit, and the bettor faces a decision: Ride the wave knowing there’s a 50/50 chance the parlay will lose or hedge. Many bettors will take their chances.

Up the wager to $50 and the parlay to 11 legs at -110 for a potential $61,335.06 payout, and the bettor might change their mind.

Hedging In-Play Lines for Guaranteed Profit

In the past, bettors were lucky if they could place in-game wagers at halftime or during commercial breaks. Now, in-play betting technology has evolved to where odds are available after nearly every action on the field or court.

Live odds shift dramatically during a game, presenting opportunities for bettors to lock in guaranteed profits. For example, if a team’s pregame line is +140 and they start off hot, the bettor may be able to snag the other side at better than +140 odds. This strategy won’t result in massive payoffs and is certainly not a path to becoming a long-term winner, but it does help casual bettors preserve their bankrolls.  

Hedging Bets After Disaster Strikes

There is a ton of variance in sports. Trades, injuries, last-minute pitching changes, and even weather conditions can significantly impact the odds.

A bettor may place a futures bet that goes great for the first eight weeks, only for a star player to go down with a season-ending injury. Similarly, a pregame total may take a downward turn if the weather forecast projects a blizzard.

Suddenly, a bettor’s wager doesn’t look very good. If they’re quick, they can grab the other side and only lose the vigorish. Or if their team was winning before disaster struck, they may even be able to lock up a few pennies. Emphasis on quick, as sportsbooks will swiftly change in-play lines to account for significant game condition changes. Sportsbooks may even suspend betting until they readjust.

Fair warning, it’s perilous to hedge against point spreads and totals that move in an unfavorable direction. By betting the other side, bettors run the risk of getting reverse middled. For instance, if a bettor has the OVER 43.5 on a Saints-49ers game, and the in-play over-under slips to 37.5, this is not a time to hedge the UNDER. Bettors will either lose the vigorish, or if the final score lands between 38 and 43, they’ll lose both wagers.

Betting the over isn’t much better, but at least there’s a chance both wagers will win.

Hedging Bets on Different Sportsbooks

Bettors are under no obligation to place hedge bets on the same sportsbook as the original bet. If anything, always hedging bets on the same book is a poor strategy.

Even for highly efficient markets like the NFL playoffs, slight odds variations will exist among books. The difference between a -165 and a -170 moneyline may not sound like much, but small discrepancies add up over time, especially if the hedge amounts are large.

Bettors can find significant value by shopping in-play hedge bets. In-play odds are calculated on the fly and are far less accurate than pregame wagers. Odds discrepancies tend to be greater across books, opening opportunities for hedge bettors to find more value.

The point is to always incorporate line shopping as part of your sports betting strategy, even for hedging.

The Math Behind Hedging Equal Profit Margins

Many hedge bettors want to ensure equal profits, regardless of the outcome, but don’t know how. Luckily, the math behind this zero-risk strategy is simple.

The key is to ensure that the hedge bet has the same payout as the original bet. For instance, if a bettor backs the Tampa Bay Buccaneers to win the Super Bowl at +600, and the wager size is $50, the potential payout is $350 ($50 original bet + $300 profit).

The beauty here is that bettors don’t even have to calculate the original bet’s payout. Sportsbooks do it for them. This is how it looks on FanDuel:

As fortune would have it, the Bucs make the Super Bowl and are up against the Buffalo Bills. The moneyline on the Bills is +120, and the bettor is looking to hedge an amount so that no matter who wins, the payout is the same.

To find the answer, calculate how much the bettor must risk for a $350 payout on the Bills. First, find the implied probabilities of a Bills win, using one of two formulas:

• Implied probability (negative American odds) = -(odds)/((-odds) + 100)
• Implied probability (positive American odds) = 100 / (odds + 100)

The rest is simple. Just take the implied probability and multiply that by the payout on the original bet. In this example, the implied probability is 100 / (120 + 100) = 45.45%. Multiply that by $350 (the payout on the original bet) to get $159.09. That’s the amount bettors will need to stake on the Bills.

The game result is now irrelevant, as the bettor will lock up equal profits. To illustrate:

• Tampa Bay wins: The bettor profits $300 on the original futures bet and loses $159.09 on the hedge bet for a net profit of $140.91.
• Bills win: The bettor loses $50 on the future and wins $190.91 on the hedge for a net profit of $140.91.

Bettors who take this route can relax and enjoy the game, knowing that the outcome’s financial implications are neutral.

The Downsides of Hedging Bets

Sportsbooks stay in business because they charge a tax called vigorish on every bet. Unfortunately, the vigorish on futures, parlays, and in-play lines – all the wagers bettors might consider hedging – is already particularly high.

Bettors pay an additional tax when they hedge. Barring an egregious error, bettors do not find hedges priced at fair market value. As a result, the bettor’s expected value will take a minor hit.

Hedging can also be cash-intensive, especially if the initial bet featured long odds. Imagine if the payoff on a $100 Super Bowl future is $5,100 (+5000 American odds). To ensure even profits on both sides, bettors will have to reach deep into their wallets – over $2,500 deep on a -110 line.

Bettors may not have that kind of expendable cash, and even if they do, the house limits may present an obstacle.

The other downside of hedging is obvious. By hedging, bettors cap their potential upside, sometimes significantly. 

Hedging Betting FAQ