What Is Hedging In Sports Betting?

We don’t really need to bury the lede. You came here wanting to know what is hedging in sports betting, and we’re here to explain it. Using industry-leading tools and information, hedging can be a monster aspect to your approach to any given slate.

What Is Hedging In Sports Betting?

React App

Hedging a bet can have a lot of different variations and can be used in all different situations, but the basic definition is when you place different bets on multiple outcomes to either reduce your risk or lock in a guaranteed profit. One of the most common questions I get on betting in our premium Discord server at Stokastic.com is what a person should do if they want to try and lock in profits on a future bet where they can potentially hedge and guarantee a return.

I want to be clear that in most circumstances you are better off not hedging, as you will give up some slight value, but each situation depends on risk tolerance. Regardless, it is important to know how to hedge correctly if you choose to go that route.

Let’s look at an example to paint a clearer picture where hedging can come into play.

Say last year you decided to bet the Rams to win the Super Bowl before the season at 10/1 odds, meaning for every dollar you bet you receive $10 back. A $100 bet would return $1,000 and come February, the Rams are in the Big Game and your ticket is still alive. They are a one-point favorite over the Chiefs and as it stands now. If the Rams win, you win $1,000, and if the Chiefs win, you lose the bet for minus $100. There is an opportunity here to guarantee profits by betting the Chiefs if you are looking to lower your risk and secure a win regardless.

Rams future bet 10/1 : $100 to win $1,000

Chiefs bet +1 : $440 to win $400

If the Rams win, you win your $1,000 future minus the Chiefs bet of $440, leaving you with $560 profit. If the Chiefs win, you win your bet for $400 minus the Rams future of $100 leaving you with $300 profit. As you can see, in this scenario, you are guaranteed a minimum of $300 profit and a maximum of $560 instead of a minus $100 to $1,000 range if you kept the original bet. The amount bet on the Chiefs can vary depending on how much variance you want in your potential winnings.

Why does Hedging Matter?

Understanding how hedging works is important even if the majority of the time you choose to let your original bet ride and not lock in any profit. If you are betting futures or other bets where you may be holding tickets with massive odds and potential payoffs, hedging is something that you should know how to do properly, as it can guarantee you lock in some profit regardless of whether or not you fully connect on that big future bet. There are other types of hedging where you can actually hit both bets known as “middles”, and we will get into that as we expand upon this topic in the future.

Editor Note: Whether you’re looking to hedge or go outright, our best bets pages can help you make the most informed decisions possible.

How Can We Use Hedging in DFS?

Hedging is more prevalent in the sports betting world when trying to lock in profit from a future bet that you are close to hitting and don’t want to let it ride. However, hedging can also take on forms within DFS even if it’s not as correlated as a straight hedge like the one described above. In DFS, there are situations where you may be fading a guy more based on ownership or just do not want the volatility associated with a given player.

This happens in golf a lot where I think a guy has a decent top-five or win equity, but the missed cut equity and ownership make him a guy I’m not really looking to target. Sometimes in that situation, I will hedge where I bet that golfer to win, but do not use him in DFS so that if we do get that ceiling showing, I get paid off, and if his volatility shows up, I’m ahead of the game in DFS and haven’t lost a ton due to just making a future bet.

If you have any questions find me in the sports betting channel at @JazzrazDFS on Twitter.

*Ben Rasa (aka Jazzraz)* has been involved with sports and numbers for quite some time dabbling in the poker world , sports wagering and of course finding a home in the DFS world. While he enjoys playing NFL, NCAAF and NBA he has found his best advantage on the links with PGA and the Euro Tour. Jazzraz focuses on GPPs and uses a analytical approach to try and find pricing inefficiencies as well as trying to go against the grain to find those under owned lesser know players that can make the difference in giant field tournaments. You can contact Ben by emailing [email protected].

DFS Winners from the Stokastic Community

Subscribe to the Stokastic newsletter

DFS advice, exciting promos, and the best bets straight to your inbox

Stokastic.com - Daily Fantasy Sports and Sports Betting Data, Tools, & Analytics

Please play responsibly. Only customers 21 and over are permitted to play. If you or someone you know has a gambling problem and wants help, call 1-800-GAMBLER.