You’ve definitely heard someone say they’re “hedging their bets” – probably your mate Dave when he’s got money on both teams in the same match and is trying to sound clever about it. But what does hedging actually mean in betting terms?
Simply put, hedging is placing additional bets to reduce your risk or guarantee yourself a profit regardless of the outcome. It’s essentially betting insurance – you’re protecting yourself against losing your original stake, or making sure you pocket something whatever happens.
Think of it like this: you’ve backed a horse at massive odds months before the Grand National, and suddenly it’s looking like a proper contender. Your tenner at 500/1 could net you five grand, but there’s still a decent chance it won’t win. Hedging means placing another bet – maybe backing a few other horses or laying your original selection – so you’re guaranteed to come out ahead regardless of what happens.
The most common scenario is when you’ve got a long-term bet that’s looking good, but you’re getting nervous about losing everything if it goes tits up. Let’s say you stuck £20 on Leicester to win the Premier League at the start of the season when they were 5000/1 (yeah, that actually happened). Halfway through the season, they’re top of the league and now 2/1 favourites. Your £20 bet could win you £100,000, but you’re bricking it about them bottling it.
Here’s where hedging comes in handy. You could back a few other teams to win the league, or lay Leicester on a betting exchange. Spend maybe £2,000 backing the other likely winners, and even if Leicester don’t win, you’ll still make a tidy profit from your hedge bets. If Leicester do win, you pocket £98,000 instead of the full £100,000 – not exactly heartbreaking, is it?
Another classic example is in-play hedging. You’ve backed Manchester United to beat a lower league team in the cup, but it’s 0-0 at half-time and they’re looking absolutely hopeless. Rather than sweating it out, you can back the draw or the underdogs to limit your losses. You might lose a bit either way, but you won’t lose your entire stake if United somehow contrive to mess it up.
Hedging works particularly well with accumulators. Say you’ve got a four-team acca and the first three have won – your £10 bet is now worth £500 if the last team wins. Rather than letting it all ride, you could back the opposition in the final match. If your original bet wins, you get most of your £500. If it loses, you still profit from the hedge bet.
The beauty of betting exchanges like Betfair is that they make hedging dead easy. You can “lay” your original selection (bet against it winning) to guarantee a profit whatever happens. It’s like selling your bet to someone else partway through.
But here’s the thing about hedging – it reduces your maximum profit in exchange for reducing your risk. Some punters get obsessed with hedging every bet, which defeats the point of backing something at good odds in the first place. If you’re constantly hedging, you might as well just bet at shorter odds to begin with.
The smart approach? Use hedging when you’ve got a potentially life-changing win on the line and you’d genuinely struggle if you lost it all. Don’t hedge every fiver you stick on the football – that’s just needlessly complicating things and reducing your returns.
