What is Hedge Betting? What does it mean to hedge a bet?
Hedging a bet is how a bettor can defend their overall financial position by placing a second bet on the opposite outcome of the original selection. For instance, if you have placed a bet on a golfer at +2,500 odds and he is at the top of the leaderboard going into the final part of the tournament, you might have current odds of +600. Your initial choice was correct, but you could still end up with nothing if the player you have backed will not end up winning.
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At this point, you could decide to guarantee a profit by placing a bet on the same player not to win, with the return from the original wager that will more than cover the cost of the second one. Depending on the event, you might be able to pick a direct not-to-happen option, while in others, you might want to have to back other selections to ‘hedge’ your original bet.
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What to do in similar circumstances is down to you and your betting strategy. Some bettors might always choose to make a profit, while others might ‘let the bet’ ride, as by backing against the selection, you will give away some potential return of the original bet you placed. When deciding whether to hedge, it makes sense to consider how confident you are that the original bet will land, having seen the latest information you have.
Coming back to our example, if, for instance, the player you backed has a history of final-round disappointments, you might be tempted to secure a smaller profit rather than risking winning nothing. If, however, he looks in complete control and it doesn’t see rivals have a realistic chance to come back, you might decide to let it play out to secure the initial potential profit.
Hedging is mainly used in futures bets. For example, let’s say you have backed a team to qualify for the playoffs. They are doing really well, but if a player gets injured or another team is looking stronger, you might decide to hedge your position to secure a partial profit.
The term hedging comes from the 17th century, and it was used for financial investments. Hedges were used to limit the size of a piece of land, and it has been used since to limit the risk of an investment to a known level.
