If you have some experience with sports betting, then you most probably have wondered -at least at some point – why can’t you just wager on both sides of a bet to counterbalance the potential profits or losses once you have already bet on an event that is quite uncertain about coming off.
And while this kind of thinking might be somehow rational in that you try everything you can to mitigate the losses generated from a non-winning bet, using a hedge betting strategy is not always the solution to a questionable pending bet.
Bettors usually wager on an event that they feel they have some kind of an edge. If they believe that they can effectively predict an outcome, they choose one of the bookmakers in Italy or in any other part of the world; they place their bet and wait for the game results with the hope of getting profits from their wager.
But there are many cases where while waiting, bettors see the chances of their bets leading to profits gradually vanishing. Let’s say the game is taking a surprising twist, and the prediction seems to be failing. Bettors, in this case, start to worry about how the game is going to end, and they want to do something to mitigate their coming losses.
Three Alternatives to a Pending Bet
When having pending bets that appear difficult to come off, bettors have three options: do nothing, cash out, or hedge betting. In doing nothing, obviously, the bettors just wait to see how the game plays and, in the end, either experience losses from a losing bet or get profits in case the bet eventually wins.
In cashing out, bettors can opt for partially cashing their bet out, receiving some of the money they had wagered. This reduces the anticipated losses, but there are two issues: first, they run the risk of losing possible profits (imagine that the bet eventually comes off, and if it wasn’t cashed out, it would generate profits for the punter). Second, not every bookmaker or betting site features the cash-out option.
Hedge Betting
In hedge betting, punters can mitigate the risks of the previously placed bet by placing a new wager. A wager on the other side of the pending bet. And this with the aim of beating the house.
Backing the opposite outcome can work in two ways: on the one hand, punters get to hedge a pending bet for which they believe it stands a pretty good chance of losing, and so they limit their possible losses by limiting their exposure to risks.
On the other hand, punters get to bet on an event that is likely to come off and thus make some profit out of it as well. So, with hedge betting, they can reduce losses from the first bet and also get winnings from the second bet (or vice versa). And this difference might also lead to profits.
So, hedge betting sounds like a very good strategy to use in order to limit exposure to risks. But then this goes somehow against the entire concept of betting and seems to be more like the stock market. Even if we choose to ignore this, under the purpose of long-term profits from sports betting, hedge betting is a workable strategy, but it has some limitations as well.
Hedge Betting Limitations
The most important limitation is that with hedge betting, punters set some sort of boundaries when it comes to their profits. Hedging a bet that, in the end, loses prevents bettors from losing big. They are playing it safe, and they only lose to the extent that the new bet winnings can cover the difference.
Hedging a bet that, in the end, wins prevents bettors from winning big. They have their initial bet winning, but the profits are reduced because of the lost amount wagered on the second bet. In hedge betting, punters need to find that particular time and the particular odds, line, and amount that optimize the profits and minimize the losses at the same time. It is only under these circumstances that hedge betting can really work as a betting strategy for punters who seek more long-term profits.