Hedging a bet explained with real prices
Hedging means betting against your own bet to lock in a result. How to work out the stake, what it costs, and when it makes sense, with this week's prices.
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Hedging means betting on the other side of your own bet so that you finish with a known amount whatever happens. The stake that makes both outcomes level is simple: the return on your first bet divided by the price of the opposite outcome. Hedging reduces risk; it does not add value. Because the second bet is placed at a bookmaker's price with a margin in it, a hedge usually hands back a slice of whatever edge you had. It makes sense when your view of the chance has changed, not just the price.
When people reach for a hedge
The urge to hedge usually comes after a price has moved your way. Two of this week's Desk cards moved like that.
| Card | First best price | Best price on 21 Oct | Our chance (unchanged) |
|---|---|---|---|
| Feyenoord at Real Betis | 6.25, Unibet (NL), 18 Oct | 5.60, Unibet (NL) | 37.8% |
| Lech Poznań v Sunderland | 5.50, Nordic Bet, 19 Oct | 5.00, Nordic Bet | 40.6% |
Someone who took 6.25 on Feyenoord now holds a bet the market values more highly than when they placed it. That feels like something to lock in. Our chance has not changed, though, which is the point of why our chance stays put when the price moves.
Working out the stake
Take a simple two-way example with round numbers, used here only to show the sum. You staked 10 on a team at 3.00, so a win returns 30. The other side is now 1.50.
Hedge stake = 30 ÷ 1.50 = 20.
| Outcome | First bet | Hedge bet | Net |
|---|---|---|---|
| Your team wins | +20 | −20 | 0 |
| The other side wins | −10 | +10 | 0 |
Both outcomes finish level, at zero. That is a full hedge. A smaller hedge stake keeps some upside and some risk. In a football match-result market there are three outcomes, so a full hedge needs two bets, on the draw and on the other team, which costs more margin.
What the hedge costs
In the example above, 3.00 and 1.50 imply 33.3% and 66.7%, exactly 100%, so there is no margin and the hedge costs nothing. Real prices add up to more than 100%, and the excess is the bookmaker's cut on the hedge, on top of the cut on your first bet. What that margin costs over many bets is in what the bookmaker's margin really costs you. Cash out is the same trade done by the bookmaker for you, usually at a worse rate, as cash out explained shows.
When it makes sense
- Your view has changed. A key player is ruled out after you bet, and you now think your chance is lower than the price says.
- The stakes are lopsided. An accumulator down to its last leg can be worth more to you than its expected value, and a partial hedge trades some of the upside for certainty.
- Your stake was too big. If the bet is a larger share of your bankroll than it should be, a partial hedge is a correction, which is the theme of staking without going broke.
What this does not tell you
It does not tell you whether to hedge a particular bet; that depends on your own estimate of the chance and how much the outcome matters to you. The round prices in the worked example are teaching numbers, not market prices, and real hedges are rarely this tidy.
18+. Bet only what you can afford to lose.
Common questions
What does hedging a bet mean?
It means placing a second bet on the other outcome so that you finish with a known result whichever way the event goes. You give up some of the upside in exchange for less risk.
How do you calculate a hedge stake?
Divide the return of your first bet by the price of the opposite outcome. That stake makes the two results finish level.
Does hedging cost money?
Usually, yes. The hedge is placed at a bookmaker's price, which carries a margin, so on average you hand some value back. It reduces risk; it does not add value.
When does hedging make sense?
When your view of the chance has changed, or when the result of one bet matters far more to you than its expected value, for example a large accumulator down to its last leg.