There are a few other examples of hedging that can be even more beneficial. Let’s look at two common cases.
Hedging A Parlay
Let’s use the following parlay as an example, combining four bets:
- Chicago White Sox Moneyline -196
- Boston Celtics +2: -110
- Dallas Mavericks Moneyline: +176
- Arizona Diamondbacks Moneyline: +198
This parlay has total odds of +2271. A $1 bet would earn you $22.71.
Let’s then assume that the White Sox, Diamondbacks, and Celtics bets all hit. The Mavericks game is coming up, and you just need them to win for your parlay to pay out.
You could hedge by placing a bet on the Mavericks’ opponent to win. In this case, the Golden State Warriors moneyline is set at -210. You could hedge with a $5 bet, earning $2.38 on a win. Here are the possible outcomes after you’ve hedged:
- Mavericks win: your parlay hits, paying $22.71; hedge loses $5 for a total profit of $16.71 (winnings minus original parlay bet).
- Warriors Win: your parlay loses, but you win $2.38 for a total profit of $1.38.
It’s a meager win, but it’s certainly not a loss. Plus, we’re using small numbers here to keep things simple. If you’re betting in bigger units, hedging has commensurate effects.
Hedging A Futures Bet
You can also hedge futures bets. Here’s an example.
Let’s start by assuming you bet $10 on the Chargers to win the Super Bowl at +1600. Should they win, the bet would pay out $160.
Now say the Chargers make it to the Super Bowl. Their line would’ve gone way down due to their season performance, making your +1600 look very good. But their opponents, the Tampa Bay Buccaneers, have Tom Brady at the helm chasing yet another ring.
Say the Chargers are slightly favored, so the Bucs moneyline is set at +150. You could place a $20 bet, which would pay $30 if the Buccaneers win. That’s a great hedge, because it allows for the following outcomes:
- Chargers win: your original bet hits for $160. You profit $130 (win minus original bet and hedge bet).
- Buccaneers win: you win $30, breaking even ($20 Bucs bet minus $10 futures bet on the Chargers).
Sure, the second outcome is less than ideal, but breaking even is better than losing!