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What Does Hedge Your Bets Mean

You have probably heard the term 'hedge your bets,' which, under one definition, means to make smaller bets on different outcomes in case your large bet does not work out. Hedging in the stock. Hedge one's bets Fig. To reduce one's loss on a bet or on an investment by counterbalancing the loss in some way. Bob bet Ann that the plane would be late. He usually hedges his bets.

Hedging is betting on both sides of an event to ensure you make a profit, regardless of the outcome.

Hedge One's Bets Meaning

Say you took a futures bet and picked the Andy Murray to win the Australian Open at a price of 9.00 at the start of the tournament. You put down 100 on Murray, which turned out to be a smart bet! Murray is in the final against Djokovic with the following prices:

Djokovic – 1.40
Murray – 3.00

What Does The Term Hedging Your Bets Mean

If Murray wins, you are golden! You come out ahead 800! However, Murray is still a steep underdog, so you may prefer to hedge your bet and guarantee a profit.

To hedge your bet, you place a bet on Djokovic which will cover your stake that you made on Murray at the start of the open. Say you bet 300 on Djokovic, so in total you are out 400:

Bet

300 on Djokovic
100 on Murray

If Murray wins you get 900, less the 400 you bet for a profit of 500

If Djokovic wins you get 420, less the 400 you risked for a guaranteed profit of 20

As you can see, you still win big if Murray pulls off the upset, but you are covered in case he doesn’t!

What Do Hedge Your Bets Mean

To see how to calculate how much you should bet to win the maximum amount no matter what on a hedge, check out our hedging formulas or, skip the math and use our simple hedge calculator.

Should I Hedge My Bets?

Bet Definition Slang

It depends. Statistically, no, you should not. Each time you place a bet you pay the oddsmaker’s margin, cutting into your profits every time you hedge. However, if you stand to make a great profit and are risk averse, hedge away!