4/6/2022

Hedge Betting Casino

In sports betting, hedging a bet means betting both sides of a game to safe guard against a loss.

Sports betting hedge funds combine the fiscally responsible aspect of investing and the fast-paced lucrative nature of sports betting. Gaining a somewhat shaky start as an NBA owner’s brainchild, these alternative investments have established themselves as viable investment portfolios. Maryland casinos hedge bets with phased-in re-openings. Maryland Live Casino Jun 22, 2020 6:11 AM Staff & Wire Reports. Casino News Maryland Casinos Coronavirus. Hedging bets in the casino, as in the real world, generally comes at a price. This, because the insurance or protection is an expense that rarely yields a return, and/or has a high cost premium. In casino gambling, the premium is typically a greater house advantage on the total at risk with the hedge than on the same amount bet entirely on the. While hedge funds are widely known investment vehicles, sports betting entities that bet their client’s money for returns that can even beat the stock market are less known. However, given an almost decade-long era of low interest rates the search for optimal returns on investment is leading many trades to consider sports betting as an. If you now bet $3,000 on their opponent (this being the hedge bet) you are guaranteed $5,000 profit no matter which team wins. Another example is having 5% of your bankroll on a 1 to 5 favorite. The game doesn’t start well, and you end up using in-play betting to lock in a 1% loss.

Let’s say at the start of the American football season you put $1,000 on an 8 to 1 shot winning the Super Bowl. They eventually make the Super Bowl as the favorites. The night of the game their opponent is 2 to 1. If you now bet $3,000 on their opponent (this being the hedge bet) you are guaranteed $5,000 profit no matter which team wins.

Another example is having 5% of your bankroll on a 1 to 5 favorite. The game doesn’t start well, and you end up using in-play betting to lock in a 1% loss. In this case by hedging you surrendered 1% of your bankroll to safe guard the 4% that was previously at risk.

The above scenarios are reasonable for even professional bettors to find themselves in. In this article I provide the math for calculating hedge stakes, and also discuss when it is strategically correct to do so. First, I cover another frequent hedging scenario that is almost exclusive to novice bettors. As this is a very common mistake I go into detail explaining it.

Hedging Parlay Bets

As a moderator of one betting forum, and a long time regular posters on others, I often see posts that are along the lines of:

“I bet $100 on a 6 team parlay (accumulator) that pays 45/1. The first five teams have won and the other is playing tonight. Should I bet their opponent at -110 to lock in a guaranteed win? If so for how much?”

It is very common for recreational bettors to add an additional team to their parlays with the intention of hedging it back should it get that far. If you are someone who does this, please read closely.

Understand that a parlay bet is nothing more than rolling a stake plus win forward again and again. Let’s look how it works on $100 using 6 bets with American odds -110.

– Bet1: $100 to win $90.91 – if win you have $190.91
– Bet2: $190.91 to win $173.55– if win you have $364.46
– Bet3: $364.46 to win $331.33 – if win you have $695.79
– Bet4: $695.79 to win $632.54 –if win you have $1,328.33
– Bet5: $1,328.33 to win $1,207.57 –if win you have $2,535.91
– Bet6: $2,535.91 to win $2,305.37 – if win you have $4,841.27

If you win all 6 you have 48.41 times you stake. As 1 was your stake this means the payout is 47.41 to 1 which in American odds is +4741. At Bovada, 5Dimes, and Bookmaker this is exactly what a 6 teamer pays when all point spreads are -110. However, there are other sites that essentially cheat players by using fixed odds. Examples include BetOnline who pays 45/1 and Topbet 40/1 on 6-teamers. This is legit as each has these payouts built it into their rules, but it is this way only to take advantage of novice bettors that don’t know any better. www.bovada.lv is a much better choice.

So, the first mistake was likely getting +4500 when +4741 was available. But, even if you had the full pay ($100 to win $4,741.27), let’s look what happens when you hedge. In order to lock it in so the profit is the same no matter which team wins you’ll now need to stake $2,535.90 on their opponent winning at American odds -110.

This gives two bets. These are:

– Bet 1 = $100 to win $4741.27
– Bet 2 = $ 2,535.90 to win $2,305.36

If Bet 1 wins, on the winning bet you get +$4741.27 and -$2535.90 on the losing one = +$2,205.37
If Bet 2 wins you get +$2305.36 on the winning one and -$100 on the losing one = +$2,205.36

Aside from the penny that can’t be split, you’ve now hedged in such a way the profit is the same regardless of which team wins. Now here’s the kicker. Go back up to where I showed manually rolling forward stake plus win and note: ”Bet5: $1,328.33 to win $1,207.57 –if win you have $2,535.91”. Do you see what a huge mistake adding extra teams to parlays only to hedge is?

If you had bet a 5-team parlay $100 turns to $2,535.91 when all 5 win. By adding a sixth team and then hedging it back, instead those same five teams winning gives you a return of only $2,205.36. That is $330.55 thrown away for no reasons at all.

Please note that even when dealing with moneyline parlays where each has different odds the result is the same. It doesn’t matter the order or anything else. The parlay payout is the same as rolling over stake plus win on each bet, no matter what odds you select.

If you’re in this scenario now, then perhaps you should hedge. This is covered in the next section. Just hopefully this section has resulted in lesson learned and you will avoid getting into the same situation in the future.

When Does Hedging Make Sense

Anytime the stakes involved are significant a hedge is ideal. There is a lot of poor advice on forums that explain otherwise by stressing the importance of expected value. This is where understanding Kelly Criterion helps. In that article, in laymen terms I explain the importance of maximizing expected growth (EG) over expected value (EV). This is also how advanced bettors should determine their hedge stakes. That aside, here are some general bullet points.

When to Hedge:

1) When the second wager is also +EV
This can happen for a variety of reasons. Perhaps you found an arbitrage situation and are betting both simultaneously. Perhaps, you’re watching television and see a player is injured and can act in those few seconds before the in-play betting odds adjust.

2) When hedging was a consideration before you placed your original bet
There are countless reasons to make over-bets. Perhaps you see a line of -6.5 in a football match and strongly suspect it will move to -7, but probably won’t move to -6. Here you might over-bet with the plan to buy it back later for a profit or for a +EV middle attempt. There are many other scenarios with future bets, live trading on betting exchanges, etc. where hedging was a known option at the time the original bet was placed.

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3) Anytime you’re overexposed
Again, this can be from foolishly adding additional teams to parlays. It might also be because an outside circumstance required you to reduce your bankroll while bets were pending. It could also be that an arbitrage or over-bet situation that went bad.

As you can see hedging is not the cardinal sin that it is often made out to be. The times you should avoid hedging is when the stakes are within your normal bet sizing (unless with no regard to your initial bet, on its own, the other side becomes +EV). The bad reputation hedging gets is somewhat deserved, because people put themselves into hedge scenarios for the wrong reason. Betting a team to win Super Bowl instead of conference, or division. Blindly over betting large favorites and cutting losses, adding more teams to parlays etc. If you avoid these and do it right, again, it does often make sense to hedge your bets.

How to Calculate a Hedge Stakes?

Odds

This is all simple algebra. Let’s say you have $100 staked on +800. The $100 is sunk, it is already in the pot so to speak. If the bet wins you get back that $100 stake, and you get the $800 winnings too, for a $900 return. Calculating hedge stakes is always based on the return. Let’s now say the other side is -465. The question is: how much do we need to bet on -465 for stake plus win to equal the same $900 return?

Most sports bettors are aware (and if you’re not please read: How Sports Betting Works) that when American odds are negative you can calculate the payout on any stake by dropping the negative sign, moving decimal over 2 places, and then dividing it by stake. For example $100 staked on -465 is $100/4.65=$21.51. Therefore $100 on bet -465 is risk $100 to win $21.51. Okay so our hedge stake equation is going to include the 4.65 for the -465 and is going to include the $900 return. Ordering this is pretty simple. That equation is:

STAKE+(STAKE/4.65)=$900

The math to solve that is simple, but if you’re presently void of grade 6 algebra skills, use an algebra.com calculator to solve that. Call stake A and format the equation as A+A/4.65=900. Using that algebra.com link, you’ll see A (stake)= $740.71. This gives us two bets.

– Bet 1 = $100 to win $800 (that’s a $900 return).
– Bet 2 = $740.71 to win 159.29 (that’s also a $900 return).

No matter which side wins we get $900 back. All together we’ve staked $100 on bet 1 + $740.71 on bet 2 for a total of $840.71. So no matter which team wins we now profit $900-$840.71=$59.29. We’ve hedged our bet in full.

Hedging 3 Way Lines

Hedging wagers with 3 or more options to bet is no different. Let’s say for a soccer match the odds are:

Home: +129
Draw: +258
Away: +229

We bet $2,000 on +129 as we calculated a huge edge. Then we find out we made a mistake. There are star players out, and now is breaking news other players are going to rest too. We decide we want off this position in a hurry. How do we hedge? Well our first bet was $2,000 to win $2,580. The return is therefore $4,580. To hedge we need to bet the amount that has stake plus win total $4,580 on each of the other options.

In this case where dealing with positive American odds so payouts calculate as stake+(stake*odds)=payout. Note: odds are the American odds with decimal moved over 2 places.

On +258 our equation is:
A+(A*2.58)=4580
Which solves to A (stake) = 1279.33

On +229 our equation is:
A+(A*2.29)=4580
Which solves to A (stake) = 1392.10

We now have 3 bets.

– Bet 1 = Risk $2,000 to win $2,580 (that’s a return of $4,580)
– Bet 2 = Risk $1,279.33 to win 3300.67 (that’s also a return of $4,580)
– Bet 3 = Risk $1,392.10 to win 3187.91 (that’s a return of $4,580.01)

Add the risks amounts of each (2,000+1,279.33+1392.10) and see we have 4671.43 at risk. We get back $4,580 no matter which team wins. As $4,580-4671.43=-91.43 we can see we’ve now hedged off the $2,000 we once had at risk, and are taking a $91.43 loss no matter if home wins, away wins, or it is a draw.

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There are many calculators that can be found searching Google that will do the math for you in calculating a hedge stake. For more advanced users you can find spread sheets for using Excel solver. As this article is in our beginners section, the purpose here was to just give a solid introduction to sports betting hedge bets.

Author: Jim Griffin

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The term 'Hedging Your Bets' or Hedge Betting basically involves placing multiple bets within the same market on various potential outcomes, taking advantage of variations across the market. This technique acts as an insurance mechanism when done correctly, and can minimise and potentially eliminate the chance of losing, with the bettor able to guarantee a return before an event has finished.

You have probably heard the term 'hedge your bets' used in everyday life. It is a phrase that denotes caution. To hedge your bets is to protect yourself from making a bad choice or decision. You may hedge your bets when you are at work by requesting more budget or time so you know you will have what you need to complete a certain project. So, what does hedging your bets mean in the world of betting?

What is hedge betting?

As with its idiomatic use, hedging your bets in betting (sometimes referred to as hedge betting) means to cover more than one eventuality so that you do not lose too much money if your original bet doesn't come off. Let's look at an example to gain a clearer understanding.

Imagine that Liverpool are playing Paris Saint Germain in the Champions League quarter finals. In our example, a bettor has placed their bet on Liverpool winning, but as the kick-off looms they are not sure it will come off. Both teams are in good form, leading their leagues by significant margins and have star players who can completely change games in an instant; the match is very difficult to accurately predict. Our bettor is having doubts, so they change their mind and place a second bet; one on Paris Saint Germain to win.

They have now hedged their bets. This is because even if the original bet does not come off and Liverpool lose, the bettor will still earn some money because of the second bet on PSG. In other words, they have mitigated some of the risk of the Liverpool win bet failing.

What are the Pros and Cons of hedge betting?

Let's deal with the cons first of all. The obvious one is that two contradictory outcomes cannot possibly take place in a match; both Liverpool and Paris Saint Germain cannot win. This means that hedging your bets guarantees that you will lose one of the bets and therefore lose some amount of money. So, hedging your bets somewhat goes against the very essence of betting, which is to make money.

However, this is where the pros of hedge betting come in. If the original bet on Liverpool loses without the second bet to back it up, the bettor loses all that stake. With the second bet placed on PSG, those losses will be diminished, so if the worst happens, the bettor will not experience quite such a bad hit to their pocket.

Hedging your bets can also take place in play. Perhaps the bettor is quite happy to stick with their original bet before kick-off, but by half-time their feelings have changed. PSG are on-form and much the more likely to win, and Liverpool's star man has been taken off injured leaving them toothless up front. A Liverpool win is now looking less likely than it was before the match, so a second bet is placed early in the second half to settle the bettor's nerves and cover the possibility of a PSG win. Again, our bettor has hedged their bets.

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Hedge betting vs cashing out

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In this example, hedging your bets is somewhat similar to the cash-out option, with a couple of notable differences. First, whereas the cash-out option is instigated by the bookmaker, who decides what to offer and when, a hedged bet is instigated by the bettor, who decides what extra bet they want to place and when. Of course, if the bookmaker you use does not offer in-play betting, hedging your bet during the match would be impossible and you would have to place additional bets before kick-off.

Secondly, whereas hedging your bets is a defensive measure, cashing out is a little more proactive and can make you more money. Hedging means you are simply mitigating a potential risk and reducing the possibility of suffering a damaging loss; you are saving a little bit of money. Cashing out does not do that; instead, it can allow you to get a healthy sum of money, even if it is likely to be less than what you would make if you were to see your original bet through to its conclusion.

So, which is the better option for a bettor who wants to cover the possibility of losses: hedge betting or cashing out? There is no hard and fast rule that you can use every time you place a bet. Every instance must be taken on a case by case basis, as the circumstances can change dramatically. What is for certain across each and every case is that it is important for you to manage your emotions, and study the game and the teams carefully.

Just because Paris Saint Germain are in the ascendency does not mean it will stay like that and they will go on to win. Just because Liverpool are struggling does not mean that they can't hit their opponents with a sucker punch. Do not over-react to the events of the match and make a bad decision (whether it is cashing out or hedging your bets) just because things are not going quite as you foresaw at that particular moment in time. Take your time, think things through carefully and come to a decision that you feel is right for you.

In summary

Ultimately, hedging your bets is all about risk and reward, and like the cash-out option, it can sting you as well as help you out. To get the most out of it, you should take care making your decisions and not rush in to anything that you may look back on later with regret. Sure that second bet could save you a large loss, but it could also cause you to miss out on the entirety of a nice win unnecessarily. Done well, hedge betting can be hugely impactful; done poorly it can be very costly indeed.

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