To hedge or not to hedge?
That is the question.
Should I Hedge My Bet?
This is one of the most debated questions in sports betting. When should I hedge my bet? This question has no one specific answer. Many factors should go into weighing a decision like this. Is this life changing money? Can I afford to lose this bet? Will the outcome affect my personal health? You are strongly encouraged not to bet with money that will have a great impact on your well being. Betting is supposed to be fun and enjoyable, so try to keep it that way.
Generally speaking, when you hedge a bet, you are losing expected value on your original bet. This is because with every additional bet you place, you are paying more vig. So what is expected value in terms of sports gambling? Expected value can best be explained as the measure of what a bettor can expect to win or lose on each bet placed. Positive expected value (+EV) implies profit over time (making the same bet over and over), while a negative value (-EV) implies a loss over time.
Hedging a Futures Bet
So you took a team to win the Superbowl at 20-1, and they are in the NFC Championship game. Should you hedge?
There is no correct answer for this question. It really comes down to personal preference. What one bettor might do, may be different from another. If this bet represents what you would consider life changing money, we would find no fault in you wanting to ensure a nice payday.
If you are depending on the payout for this bet, or if it makes you lose sleep, or creates added stress, we would also urge you to hedge. It is not worth putting yourself through a stressful situation. Hedge the bet and walk away if any of the above apply.
If on the other hand, it is just another bet for you, you should let your bet ride. Every time you hedge, you are realistically costing yourself money, even though it might seem like the opposite. Since every additional bet, generally speaking, has a negative expected value, you are doing yourself a disservice by hedging. If you however like a line, and you believe that hedging has a positive expected value, then by all means hedge the bet.
What Not To Do
If you love to make parlays, we would strongly urge you not to add an extra leg to your parlay, if your plan is to hedge.
Some bettors will commonly add the Sunday Night Football game or Monday Night Football game to their parlay, just to give themselves an opportunity to hedge before the game is played. This does not provide you with any benefit. If you are adding an extra game with the sole plan of hedging, you are better off just not adding the game to begin with.
Early Cash-out vs. Hedging
Today, the vast majority of sportsbooks offer the early-cash out feature. This can be live in-game or before the match begins. Generally speaking, these sportsbooks will charge you roughly 10% to use the early cash-out feature to settle your bet, although it does vary from sportsbook to sportsbook.
Ok, so you have a five-team parlay going, and you already won four selections. Should you hedge or use the cash-out feature?
If you find yourself in this scenario, and you are determined to walk away from the parlay, hedging the bet by betting on the opposite side is far less expensive than using the cash-out feature. It shouldn't be too difficult to do some math, and see which outcome pays the most. Let’s use a futures bet to do some calculations and see which the better option is.
Ok, so you took Green Bay to win the NFC Championship, and they are now one win away. You are determined to guarantee yourself a payout, should you hedge or cash-out?
Green Bay to win NFC Championship
Bet: $100 to win $1000
Cash-out Offer: $465
Game odds: Green Bay -150 / Tampa Bay +130
The Hedge: If you bet $480 on Tampa Bay at +130 - You would risk $480 to win $624
Based on this bet, there are 2 possible outcomes:
The Result: Green Bay wins - you win your futures $1000 and lose the Tampa bet $480 for a result of +$520
The Result: Tampa Bay wins - you win your hedge $624 and lose your futures bet $100 for a result of +$524
By hedging you can guarantee yourself $520, while the sportsbook cash-out was only offering $465. That's an extra $55 in your pocket! Before taking a cash-out offer, always do some calculations; by doing so, you will be able to determine which is the most profitable option.