To Hedge or Not to Hedge... That is the Question

First of all, no matter what anyone says, there are no rules when it comes to hedging bets. You hear people say things like “never hedge under any circumstances” but hardly anything is ever that absolute in life.

Most bettors are not professionals and are not aspiring to be, so applying “pro” logic to hedging situations makes no sense. For example, if someone places a $5 parlay with a terrible expected value, but happens to have 1 leg left to win $100K, the correct decision has more to do with that person’s comfort level than whether or not it’s the correct play mathematically. Assuming this bettor had access to $50K cash, and he wanted to hedge and secure a $50K profit on the bet, who am I to tell him it’s a bad idea?

One approach/strategy I would recommend implementing is “middling”. A middle is a bet that is similar to a hedge, but also gives you a chance to win the original bet as well. If I’m going to make a -EV bet, I would opt to go that route. Let’s use this real life example from s’Hertogenbosch last week. I had Diallo outright at 16/1 (+1600). Instead of hedging with Bergs ML in the final at around +160, you could play Bergs +2.5 games at -110. This would give you the chance for Diallo to win the match and Bergs to cover the game handicap. I wouldn’t do either one, but it’s an option.

Now let’s talk about the “Cash Out” option. While there are some situations where it could be useful, I’d say about 95% of the time it’s a truly terrible move, and one the books are usually begging you to take. You can almost always find better value just by hedging on your own at market price, even though that’s -EV too.

But, let’s say you are trying to approach betting like a professional, and you want to focus on making better decisions to grow your bankroll. What types of things would you do differently than an amateur?

The biggest difference between an amateur bettor and a pro is that the pro wouldn’t place that type of long shot bet in the first place, barring some rare circumstances. Pros don’t put themselves in positions where they feel like it makes more sense to place a -EV bet. It’s similar to poker where you pass on playing decent hands in early positions to avoid getting yourself into trouble on later streets.

Personally, I prefer to limit the “to win” amount on any bet (including futures) to something that I don’t mind missing out on if it loses. My standard unit size on regular bets is around $300, so it doesn’t make much sense for me to put amounts like $1000 on bets in the 16/1 range unless I feel the value is just outrageous.

One example of a situation where I would place a bet with the intention of hedging is when there’s a market for one thing but not the specific thing that I’m looking for. For example, let’s say I like Diallo to reach the final, but I can’t see him beating Alcaraz once he gets there. Sometimes there’s no “Reach Final” market, but there’s almost always an Outright market. If I can get 20/1 outright and I feel I will be able to hedge at around even odds, then I’m basically getting 10/1 on Diallo to reach the final.

For the most part, there is only one situation where I would hedge when I initially planned not to… and that’s if something changed dramatically, like an injury or something to do with the playing conditions (balls, surface, weather, etc.). In this case it would be more like backing out of the bet instead of hedging to secure a certain amount of profit.

In the long run, hedging is most likely going to be a -EV decision. But, you should always do what feels best for your personal situation, especially if you are a recreational bettor. Also, look into options for middling before you opt for a complete hedge.