What Is a Hedge Bet? When and How to Hedge Your Bets

What Is Hedge Betting?

Hedge betting is placing a second bet on the opposite side of an existing wager to reduce risk or guarantee a profit. It's the sports betting equivalent of buying insurance. You give up some potential upside in exchange for downside protection.

The most common scenario: you've placed a futures bet or the first legs of a parlay have hit, and now you have the option to bet the other side of the final game to lock in a guaranteed return regardless of the outcome.

When Hedge Betting Makes Sense

Scenario 1: Futures Bets Near Completion

You bet $100 on a team to win the championship at +2000 (21/1) before the season. They've made the finals. Your potential payout is $2,100, but if they lose the final, you get nothing.

By betting against them in the final, you can guarantee profit either way.

Scenario 2: Live Parlay with One Leg Remaining

You have a four-leg parlay and the first three legs have hit. The potential payout is $1,500 on a $50 bet. You can hedge the final leg to lock in guaranteed profit regardless of that game's result.

Scenario 3: Changed Circumstances

You placed a bet based on a certain lineup or weather condition. New information has changed the picture, and hedging lets you reduce exposure when your original thesis no longer holds.

How to Calculate a Hedge Bet

The math is straightforward. You want to find the stake on the opposite side that equalizes your profit across both outcomes (or achieves your desired profit split).

Equal Profit Hedge Formula

Hedge Stake = Original Payout / Hedge Odds

Where:

• Original Payout = total return on original bet (stake + profit)
• Hedge Odds = decimal odds on the opposite side

Example: Futures Hedge

• Original bet: $100 on Team A to win title at +2000 (decimal 21.00)
• Potential payout: $2,100
• Hedge odds: Team B (opponent in final) at -150 (decimal 1.667)

Hedge Stake = $2,100 / 1.667 = $1,260

Guaranteed profit: $740 regardless of outcome.

Partial Hedge

You don't have to hedge for equal profit. If you believe Team A has a genuine edge, you might hedge less, accepting more risk on a Team B win in exchange for a larger payout if Team A wins.

Partial hedge at half the calculated stake ($630):

You still profit either way, but heavily favor the Team A outcome.

The Hidden Cost of Hedging

Here's what most guides don't tell you: hedging always has a cost, and it's often larger than you'd expect.

The Vig Problem

When you place a hedge bet, you're paying the sportsbook's vig on that new bet. The bookmaker's margin means your hedge bet has negative expected value by itself.

If your original bet was +EV, hedging essentially converts a +EV position into two positions where the hedge side is -EV. You're paying for certainty.

The Expected Value Perspective

Using our futures example, if Team A has a true probability of 55% in the final:

Without hedging:

• EV = (0.55 x $2,000) - (0.45 x $100) = +$1,055

With full hedge:

• Guaranteed profit = $740
• EV = $740 (certain)

You're giving up $315 in expected value for the certainty of $740. Whether that's worth it depends on your financial situation, risk tolerance, and bankroll management approach.

When the Math Says Don't Hedge

If your original bet is still +EV and the hedge is -EV, pure expected value theory says: don't hedge. Every dollar you hedge costs you expected profit.

This is the mathematically correct answer for a bettor with infinite bankroll and infinite time horizon. In practice, real people with real money may rationally prefer guaranteed profit.

When You Should Hedge

Despite the EV cost, hedging is rational in several situations:

1. Life-Changing Money

If the potential payout is significant relative to your personal finances (not just your bankroll), hedging makes sense. A $10,000 guaranteed profit is more useful than a coin flip for $20,000.

2. Bankroll Preservation

If losing the original bet would significantly damage your betting bankroll, hedging preserves your ability to continue betting. This is especially relevant for bettors using Kelly criterion because a massive loss can take months to recover from.

3. Information Has Changed

If your original thesis is no longer valid (injury, weather, lineup change), hedging to reduce exposure is smart regardless of EV calculations.

4. Parlay Insurance

The last leg of a high-value parlay is a classic hedge spot. You've already beaten long odds, so locking in profit is rational even at an EV cost.

Hedging vs. Arbitrage

Hedging and arbitrage betting are related but different:

The key distinction: arbitrage is a strategy for finding profit. Hedging is a tool for managing risk on an existing position.

Advanced: Middle Opportunities

Sometimes when hedging, you can create a middle, which is a range of outcomes where both bets win.

Example

• Original bet: Over 220.5 points at -110
• Line has moved to 225.5
• Hedge: Under 225.5 at -110

If the total lands between 221 and 225, both bets win. Outside that range, one wins and one loses, but you've sized your hedge to guarantee a small profit or break even.

Middles are the best-case scenario when hedging because you get risk reduction with a chance of winning both sides. Use a middle calculator to evaluate these opportunities.

Key Takeaways

• Hedging guarantees profit at the cost of expected value
• Calculate your hedge stake by dividing the original payout by the hedge decimal odds
• Hedging always costs EV because you're paying vig on the new bet
• Don't hedge small amounts because the transaction cost (vig) isn't worth it for marginal positions
• Do hedge life-changing sums. Guaranteed money has real utility beyond EV math
• Look for middles when hedging since they offer the best risk/reward profile
• Use a hedge calculator to run the numbers before placing any hedge