Home Gamble 4 Pros and Cons of Hedging Your Sports Bets

4 Pros and Cons of Hedging Your Sports Bets

Source: patriotledger.com

Betting has always been a part of sports – one can’t deny that it spices up the competition. You always place a bet in the hopes that you’ll win a hefty amount, but it doesn’t involve just hope. Stuff like probability, strategy, and risk factors are also involved. Knowing how to minimize losses in a sports bet is highly useful – you never know when a game will turn upside down. This is where hedging steps in.

Hedging – Brushing Up The Basics

Source: ft.com

Hedging is when a person places a wager on the opposite side of their first and original bet. Simply put, it is when you wager a new bet on a distinct outcome than the one you originally rooted for. This strategy is followed so that the factor of loss is eliminated or minimized as much as possible.

This strategy helps you to stay in a favorable situation, even when your original bet loses. Generally, hedging is taken up by a bettor after they sense a change in circumstances of the sport. Visit ufabet to learn more about hedge betting.

There is no rigid set of rules as to when you should or should not hedge a bet. As a bettor, you should critically consider how much risk you are ready to take and how the outcome of a bet will affect your bankroll. Also, one should never ignore the statistical and mathematical side of betting – this definitely spells danger.

Pros of Opting Hedge Betting

Hedging offers you flexibility, and that’s why many people prefer it. By hedging a bet, you can mitigate losses and ensure a minimum profit. This strategy also comes in handy during an accidental bet.

1. Cushioning Your Losses

Source: inc.com

As mentioned earlier, the primary purpose of hedging is to mitigate your losses. When you wager two or more bets, then the chances of earning a profit increase.

For example, let us say that in football, Team A and Team B are scheduled for a match today and stats show you that Team A has a 65% probability of winning. Let’s say that you wager on that team. But halfway through, you find that Team B is leading 2-0, so obviously you will start doubting your decision. So, you now hedge a bet on Team B.

Now, whichever team wins, you will be assured of some minimum profit, or in the worst case, the minimal loss. This is why hedging is advantageous – it helps you reduce or avoid losses completely.

2. Handling Risk Exposure

Source: investopedia.com

Betting always involves risk, but by following certain strategies and implementing expert techniques, one can avoid getting tangled in heavy losses. Hedging is one of those strategies. By placing your bets on two or more outcomes, you reduce the risk of losing too much money.

Also, with hedging, you’ll be able to spread your funds through a few options instead of settling them on a single wager. The flexible nature of hedge betting allows you to practice better bankroll management. By applying hedging, you can handle risk exposure expertly.

3. Assured Profits

Source: squarenet.co.uk

There are situations in which, by proper placement of bets, you will be able to make a solid profit. By placing the right wagers and calculating how much you’ll be putting into each bet, you can end up in a situation that favors you, regardless of the winning side. This is why many people are eager to try hedging.

Also, hedge betting is handy during a parlay. Let us assume that you place a parlay on five football teams, and the first four have won. Before the fifth team is about to play, you decide to hedge, because if your fifth team loses, you lose the whole bet. But by wagering a hedge on the opposite team of the last team, you can secure a profit.

4.  Managing Accidental Bets

Source: azcentral.com

Accidental bets are common enough – even the smallest of mistakes can cost you a lot, so hedging is one of the best ways in which you can manage these. In certain cases, you won’t be able to cancel a bet once it has been placed. In situations like this, hedging will help you reduce the losses that are caused due to your earlier mistakes.

Although hedging is not always easy, it does provide a hopeful alternative – many people will agree that instead of sitting and waiting for the results to come, you could invest in another option.

Cons of Hedge Betting

Like any other strategy, hedge betting also has its disadvantages. Although these are not as significant as the advantages that hedging offers you, it is always advised that you know all the risks before you get into this kind of betting.

1. Loss of Potential Profit

Source: football-talk.co.uk

Let us say that you have wagered that Team X will win against Team Y today in football. After Team Y scores 3 goals, you feel uncertain and decide to hedge – so you place a bet on Team Y. But in the end, Team X manages to score 4 goals and wins.

Now, your initial bet would’ve promised you a comparatively larger profit than your hedge bet. But because you opted for hedge betting, you will only be able to make a reduced amount of profit. The once-possible profit you could have earned, is now not yours.

2. Against the Spirit of Betting

Source: nuwireinvestor.com

Betting is mainly done to make some sort of profit. In hedging, a bettor will put their money in two or more places to ensure that they are on the convenient side of the outcome. But be it any game, there is no chance of all the outcomes turning out true – that is, even if you bet on three different outcomes, only one of them is going to come true.

You will face a loss, but it will be minimized. This is, in a way, against the whole point of betting itself.

3. Risk of Investing Premium

Source: valuestockguide.com

Opting for the strategy of hedging comes with an associated cost – to mitigate any losses that might occur, you are investing more premium, but in another bet. One could view this as paying an amount from the profit they are going to make. Instead of investing a certain amount and coming back with a profit, you opt to invest twice but come back with only one profit.

4. Unfavorable Situations

Source: betterincomestream.com

Sometimes, things just tend to go wrong and any kind of preventive measure isn’t enough to stop that. A bettor should always know that a wager could go any way, even when the probability or stats doesn’t actually support the original outcome. The financial risk is especially high in hedging because you invest twice.

Final Words:

Hedging, especially in sports betting, is a risky but rewarding strategy. You should be aware of how much you are ready to risk – without any prior gambling experience, it is not advised to jump into hedging head first. Remember that, even though hedging offers several advantages, it comes at a cost. In the end, it is all about your personal opinion and how you view bets – there is no right answer to whether or not hedge betting is an advisable option.