With hedge betting, punters have the chance to reduce the risk of losing their money on a bet that in the beginning seemed very likely to win, while coming closer to settlement, it seems quite likely to be lost. In short, if you have placed a bet on an event which as the time goes by appears more and more possible to lose, then you can reduce the risk of losing your bet while even guaranteeing some profit by hedging your bet.
Professional bettors use hedging in order to manage risks when placing their wagers. Whether we are talking about basketball betting in general or about NBA betting in the Philippines specifically – for example, professional bettors often hedge their bets in order to mitigate risks and reduce their exposure to potential losses.
Imagine that in some cases they have the chance not only to prevent them from losing an original bet, by covering the losses, but also make some more money -profit – from hedging the bet.
Let’s see how they can do this.
Consider a bettor wagering on the victory of a specific team in a pre-game bet. Initially there is strong confidence that this team will win the game and so the bettor expects to make profit from this bet. But as the game progresses it appears that the opponent is getting stronger and is showcasing a very good performance which jeopardizes the bet.
As the game plays out, it seems more and more possible that the team won’t be able to win and so the bettor is running the risk of losing his money.
Now, there are three different choices for the bettor:
The first choice is to just wait and see until the end of the game. Nobody can tell for sure what is going to happen in the end. It might be the case that the team recovers soon, regains control of the game and eventually wins and so does the bet. Or it can also be the case that the team loses and so the bettor loses his money too.
The second choice is to cash-out the bet, provided that the online sportsbook offers this option. Cashing-out means settling the bet earlier and compromising in getting back part of the amount that was put on the original bet.
The third choice is to hedge the original bet. Suppose the bettor finds that wagering on the other side of the bet offers opportunities not only to cover the original bet but also to secure some profits.
If such an opportunity arises, then the bettor can hedge and achieve either to maintain his bankroll unchanged (evening out losses with gains) or increase his bankroll (winning some profits from the hedge). Well, there is nothing better than this last one, I can tell you for sure!
But in order to be able to tell whether there is an opportunity for hedging, you need to be able to make some calculations. You’ll have to calculate how much you should bet on the other side of your original bet so as to cover the potential loss or even generate earnings.
Suppose you have bet 100 euros on the victory of Team A at 3.2 and you expect to gain -should the bet wins – a total of 320, of which the 220 is the profit. Let’s say you want to hedge this bet and wager on the other side, on the victory of Team B, because you see that the game has been turned around in favor of the opponents, who are now given at 1.5.
How much should you hedge in order to prevent a loss?
Well, the formula is simple.
Hedge bet = original bet/(hedge odds – 1)
Original bet = 100
Hedge odds = 1.5
So, 100/(1.5-1) = 200. This is the amount you should bet to prevent you from losing your initial 100 put on the original bet if it eventually loses.
You’ll get 200*1.5 = 300 from the new bet, 100 of which is your profit. And this 100 actually covers your loss from the original bet.
Now, if the original bet wins in the end, you’ll have 360 gainings. But you will already have placed 300 on bets (100 on the original and 200 on hedging), so you’ll be getting a profit of 20 euros as well!
How much should you hedge in order to optimize profits?
You can calculate more than just the amount necessary to keep you safe. You can also calculate the amount that secures profits in each case. Let’s see how this is done:
Hedge bet = (P+B)/Hedge odds
P = the profit you expect to gain from your original bet
B = the original bet
Hedge odds = the odds for the new bet
Based on our previous example, here the amount you need to bet for hedging is:
Hedge bet = (220 + 100)/1.5 = 213.33
Now your expected profit from the original bet was 220 and your hedge bet is 213.33. Their difference, (P – Hedge Bet = 6.67) is the guaranteed profit that you’ll make regardless of the game result.
Betting 213.33 on the opposite side of your original bet and having this won, means that you’ll be getting back 319.99. You will have covered the initial 100 plus the 213.33 and you will earn 6.66. If the original bet wins, then you’ll have 220 profits minus the hedge bet 213.33, so 6.67 in earnings!
So, these are the basics that you need to know about hedging, how it works and how it is calculated. Note that hedge betting is a viable and an often preferable strategy for punters who do know how to do it. If you feel comfortable with everything we described above, then you can try it and you’ll find that it is a good way to manage risks in betting.
For sports that are very volatile and fluid and where there are constant changes and turnarounds of the games it might be quite useful to consider hedge betting as a strategy!