Hedging your bets - The basics
The word “hedge” is popular in stock markets, finance, De-Fi, and also the betting industry. It simply represents the art of caution and how you can protect yourself from suffering losses wholly or partly.
Essentially, hedge betting involves betting on different outcomes to your original bet. So, you can place several bets in the same market and optimise the power of variations in the betting market. If you get it right, it’s more like an insurance strategy. As such, you can greatly reduce or remove any chance of losses. Also, you have a higher chance to get some reward even before the game ends.
For instance, you can hedge your bets to reduce your risks when the odds have shortened after a prior pay bet or drifted after a prior back bet. This mechanism minimises your overall exposure. In that same regard, you could get your reward when the odds have drifted after an initial lay bet or shortened afternoon an initial back bet. To fully understand the basics to hedge betting, you must be familiar with its rules, pros and cons, and how to calculate it.
General rules for hedge betting
The number one rule for hedging a bet is to bet high and lay low. Also, you should be able to identify market movement trends very precisely. On that note, it’s vital to learn the benefits and setbacks of hedge betting to better understand it.
Again, there is no point in hedging your bets just for the sake of it. You need to genuinely believe more than one horse could win the race, or you are wasting time, effort, and money by employing this technique. The betting markets should always act as your guide to the race. Say there is a big plunge on a horse you hadn’t previously considered. You have to decide at that point whether to hedge your bets or stick with what you have. These are judgement calls that every bettor needs to make at some stage when they are gambling on the races.
Pros and of hedge betting
- Without hedging, a wrong wager means you’ve lost all that stake.
- It helps to diminish losses
- You can do it while the game is in play.
Cons of hedge betting
- You’ll lose some money either way.
- It goes against the primary purpose of betting- which is to make money.
Calculating your hedge bets
Now, if you want to fully grasp the basics of hedge betting, learning to calculate it is a final step in the fundamentals. You can manually calculate or use a hedge betting calculator.
Calculating it will help in instances where you want to place a hedge while the game is in play. In the instance that you set a bet before a match, but in between the game, you have a change of mind, or a situation caused you to lose trust in the first bet, you can place an early second bet to put your stake at ease. Perhaps, you were confident with Horse A, but later noticed a weird attitude in the horse just before the race, hedge betting calculation is useful in this regard.
Here, we’ll explain how you can use a hedging calculator to determine your hedge and potential profits and risks;
- Choose either back or lay based on what you originally bet on the market.
- Enter your original stake and the decimal odds you bet with.
- State the opposing odds that are now available in your selection.
- Enter the commission for the betting exchange you bet with.
- The hedging calculator should show the amount you should back or lay to lock in a guaranteed market position, regardless of the result.
- You can use the slider to partially hedge a market. This allows you to trade out only a set percentage of your original bet.
How to Hedge Bets & Meaning Explained
- Any time you bet on two or more horses in the same race, you are hedging your bets.
- This is done so more potential outcomes are covered.
- As a general rule the less competitive a race is, then the more difficult it is when hedging your bets to turn a profit across the wagers.
- I may hedge my bets when I am struggling to choose between two or more prominent horses in a competitive betting market.
- The purpose is to mitigate the risk of just backing one horse by at least saving stakes.
We are going to be right up front with you from the start. Unless there is a dead heat, in other words, a tie, in a horse race where two animals hit the line together, when you hedge your bets one of your wagers will definitely lose unless you backed the horses each way. You may be thinking why bother to hedge my bets then? Context is everything. It is only certain types of a race - perhaps ones that are open with lots of horses competing in them, and chiefly big field handicaps - where hedging your bets is appropriate.
More on the hedge your bets meaning
Hedging your bets has become an idiom in the English language. Few gambling terms can boast such status. To recap, this is the hedge your bets meaning ....
to place bets with a third party, namely bookmakers or a betting exchange, with the aim of offsetting potential losses..... You are reducing the risk that you may have made a mistake with your initial view or reading of a race. By hedging your bets, you are keeping your options open.
You can argue I hedge my bets when both backing a horse to win on a fixed-odds sportsbook and then lay it to lose on a betting exchange. That is a more complex idea than simply betting on two or more horses at the bookies to win. What we think will be useful to help you get your head around how to hedge bets is a working example.
A detailed example of how to hedge bets
Let’s say the Cigar Mile Handicap has a particularly open look to it betting wise this year. The race at Aqueduct Racetrack in New York City has attracted 16 horses. You like the look of the 5.00 (4/1) favorite in the betting and place a $10 win stake, but study the form more closely and think it could also be worthwhile backing another horse at odds of 7.50 (13/2).
As soon as you wager on the second horse, you are hedging your bets. A $6 bet here brings your total spend on the Cigar Mile to $16. If the favorite wins, then you stand to make $40 profit on that bet minus the $6 you staked on the second horse. That would mean you are $34 up across the two wagers.
However, if the favorite loses but the $6 bet comes in, then you have $39 of profit minus the $10 lost. That is $29 up over the course of the two wagers. It is also worth remembering that hedging your bets doesn’t guarantee a profit, as there is the scenario where you back two or more horses and none of them win!
Hedge your bets
Place your bets on different outcomes
When should I hedge my bets?
Now you understand the hedge your bets meaning, we are going to expand on the types of races where using this device for gambling works best. Not all favorites win, but there is usually a good reason why oddsmakers put something at the head of the betting. It may have the best form or put together an impressive winning sequence and be undefeated in competition.
- When the sportsbook traders are having a hard time coming up with a favorite
Do you want to hedge your bets against such a horse? That is a brave view to take, unless you feel strongly about one of its rivals. It pays more often to be hedging your bets when the sportsbook traders are having a hard time coming up with a favorite.
Say a big betting handicap like the Metropolitan at Belmont Park has had several market leaders. That suggests the horses competing in the race are much of a muchness, and it’s hard to have a strong view. This is the time to be hedging your bets.
- When the size of a field for a race is bigger
The theory goes that the bigger the size of a field for a race, then the more you should hedge your bets as you narrow down the runners to form a shortlist. This is what professional tipsters like you will find online or in your local paper do with big, competitive horses races like graded handicaps.
- When there are age restrictions or no standout horse in the field
It doesn’t have to be a handicap where a racehorse’s weight is determined by its official rating for the time to be right for hedging your bets, though. By the same token, if a stake or age-restricted race also has an open feel to it with no standout horse in the field, then that is another scenario that could be worthwhile.
- Market conditions: Just take hedging your bets on a race-by-race basis, depending on what the market is like.
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How about other horse racing betting strategies?
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There is more than one way to save your stake
Taking a look at how an each way bet can also be beneficial in this regard. Backing horses not just to win, but place and show allow you to cover more bases. Did you know there are times when one horse running second or third is better value in a betting sense than backing the winner? This is why you should always seek saver bets each way and we have a comprehensive guide to that.
Leverage in play betting horse racing
Contrary to popular belief, there is such a thing as
in play betting horse racing. It isn’t called that, though. The correct term is bets in running and you won’t find them on a fixed-odds sportsbook. To find out what price a horse is in the run, you need to head over to a betting exchange while the race is taking place. If you know a racehorse stays and likes to come from off the pace, then this is one betting angle that could prove very fruitful to exploit.
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The last word on hedging your bets
With that “hedge your bets’ meaning explained and worked through, you should now be fully aware of the term and where and when it applies to horse racing and general sports betting. A quick disclaimer- Wanting to hedge your bets doesn’t mean you don’t know how to gamble on the horses. Far from it, in fact. It is a technique like any other made with the aim of getting a little ahead in what is overall meant to be a bit of fun. Don’t lose sight of that either.
You will find as you become more experienced with betting over time that you develop a better sense of when hedging your bets will pay off. Just remember to gamble responsibly and never stake more than you can afford to lose. Check out our
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FAQ
1. 🐎What does “hedging your bets” mean in horse racing?
It simply means to place extra bets on different outcomes to guarantee a profit or reduce losses regardless of the result. When you bet on multiple horses or multiple wagers, you spread the risk even if your original bet loses. It’s similar to an insurance policy providing a safety net against the unavoidable unpredictability of betting.
2. 🤹🏿How do I calculate hedge bets effectively?
You can calculate your hedge bets manually or with a calculator. You can enter your original stake and the odds you initially bet on, then input the opposing odds now available. Include the commission rate from your betting exchange. The calculator will show the amount you should back or lay to ensure a profitable or less risky position.
3. 🤹🏿What are the pros and cons of hedge betting?
Hedge betting is primarily for reducing risks and minimising losses. Again, it allows the thrill and flexibility to adjust bets even in the middle of a race. Also, it allows players to cover multiple outcomes. However, it may lead to smaller profits since the stakes are spread across multiple bets.
4.⏱When is the best time to hedge my bets in horse racing?
The best time is in open, competitive races with multiple strong competitors. Hedge betting works best where the odds fluctuate regularly, enabling you to take advantage of favourable market movements.
