Most betting enthusiasts have at least some idea of what hedging your bets is. The basic idea is that, as opposed to placing a single bet on a single outcome, multiple bets can be placed on different outcomes.
This concept is used to minimise risk in the sports betting world. If hedged bets are placed smartly, at least some payout can be won, even if other bets fail. Or, alternatively, it is possible that a small profit is even guaranteed, depending on circumstances.
The trick to hedge betting is that it can be complicated, and even confusing. This is why some betting enthusiasts tend to shy away from the strategy, even if it is considered to be essential.
How Does It Work?
First and foremost, it should be understood that most utilise hedge betting as a combination betting strategy. A risky bet will be placed on a less likely outcome, which will result in a big payout if it is a success. But, given that the bet is risky, a second bet is also placed. The second bet increases the chances that if the risky bet fails, which it may very well, that some money is made back.
If the second bet completely covers the initial amounts staked is another story, and part of why hedge betting can seem so confusing to some bettors.
Hedge Betting Example
Car insurance is used as a prime example of hedge betting in action. The cost of insuring a vehicle isn’t cheap, but many choose to do so regardless. This is because the cost of insurance is at least predictable, and won’t drastically or suddenly change. Hence, it is a cost that many will swallow.
The unexpected cost of being in an accident, and suddenly having to face enormous costs, is a far less desirable situation. However, there is no guarantee that the vehicle owner will ever be in an accident.
Hedge Betting In Sports
But how does this apply to the sporting world?
A good example would be the following; you choose Team 1 in the NHL to win a series, and stake $100. They are already an underdog, but you’re willing to risk it. However, in the opening game Team 1 win against Team 2, and suddenly Team 2’s odds have become a great deal longer than when you originally placed the first bet.
Placing an additional $200 bet on Team 2 is hedging your bets. Regardless of which of these 2 teams win the series, you are guaranteed a profit, since the longer odds mean a bigger payout. The payout of the second bet will cover the cost of the first, and still make back money.
Of course, it takes a smart bettor to see the potential of such situations, and make hedge bets accordingly. If you choose to make hedge bets is up to you, but well placed bets of this kind are a great way to increase the chances of winning, while minimising potential losses.