Hedging your bets, then, is gambler’s insurance – a way to limit your loss or ensure some gain when your first bet is looking unstable. You are essentially making another bet that covers the opposite of your first bet.
The example we all reach for is the Grand National. You place a horse at 100/1 months in advance for a fiver, and it’s now coming in at 10/1 on the day of the race. You have a potential £1,000 gain dependent on it, but also the potential to lose your original stake if it loses.
This is where hedging comes in.
You could put the same horse on a lay with an exchange at the current 10/1 for £100. If your horse wins, you can take in £1,000 from the original bet but lose £900 on the lay bet – a profit of £100. If it loses, you get to keep the £100 from the lay but lose your original tenner – so you’re £90 in profit either way.
Not bad for a risk-free bet.
There are numerous hedging opportunities there with football too, especially with in-play. Maybe you’ve backed Chelsea to win against Brighton at evens for £100 but Brighton get off to a flying start and Chelsea’s odds come out at 3/1. You could lay Brighton or the draw to guarantee some form of return no matter what happens.
The key is recognizing when things have changed enough to hedge. Sometimes it’s odds movement, sometimes it’s what you’re seeing happen before your eyes.
Live betting made hedging so much simpler as you get to react in real time. Your accumulator’s going along just fine until the final leg, so you hedge by laying the opposing outcome to make a profit. Sounds completely logical when you have good money on it.
There are many different ways of doing it though. Partial hedging means you’re still at risk but reduce the risk. Full hedging eliminates risk altogether but caps your potential winnings. It’s a matter of what you’re satisfied with really.
Others use hedging strategically from the start. They will place money on long-term markets like Premier League winner or tournament outright, and hedge once prices narrow over the course of the season. Not a bad means of banking returns if you have made a solid early doors bet.
The only drawback is that hedging usually takes away your maximum possible win. You’re risking potential big wins in exchange for safety, which isn’t for every type of bettor. Some gamblers like to see their initial bets ride and reap whatever reward comes their way.
Timing is everything with hedging. Do it too early and you will lose your first bet to come in. Hold out too long and the opportunity may have passed or the hedge bet might not be worth enough to be worth taking.
Exchange betting has facilitated hedging to a large extent since you can lay the selections and also back them. Prior to exchanges, you had to search for a bookmaker with reasonable odds on the opposite result, which was not always easy to accomplish.
The psychological aspect is also interesting. Some punters hedge because they cannot bear the stress of significant possible losses despite the fact that the original bet still seems to have a good chance of working. Other people believe hedging is admitting defeat and will remain with their original opinion.
Intelligent hedging probably equates to working out the math first. Work out what you might win or lose with different levels of hedge, then whether the guaranteed return is worth losing the potential bigger win.
Fact of the matter is, there’s no right or wrong about it. Hedging can be a good risk management tactic or cost you money if you over-hedge.
