What Is Hedge Betting?
5 min read · Free
The Simple Explanation
Hedging means placing a second bet on the opposite outcome of a bet you've already made — to reduce your risk or lock in a profit.
Think of it like insurance. You already bet on one team, but you're not sure they'll win. By betting on the other team too, you cap your downside — or even lock in a profit if you do it right.
A Real Example
Imagine you placed a $100.00 futures bet on the Chiefs to win the Super Bowl at +500 (5-to-1 odds). If they win, you collect $600.00 total ($500.00 profit + $100.00 stake).
But now it's Super Bowl week and the Chiefs made it. FanDuel has them at -200 to win (a strong favorite). You don't want to lose your $100.00 bet profit...
The Hedge:
Bet $300.00 on the Eagles (Chiefs' opponent) at +180 at DraftKings.
Chiefs Win →
+$500.00 from futures
−$300.00 hedge stake lost
Net: +$200.00 profit
Eagles Win →
+$540.00 from hedge
−$100.00 futures stake lost
Net: +$440.00 profit
You locked in at least $200.00 in profit — no matter who wins the Super Bowl.
The two outcomes aren't equal because $300.00 isn't the balancing stake — it just happens to be a round number. Hedge more and you lift the Eagles branch while lowering the Chiefs one; the floor is whichever side pays less, so your guaranteed profit is $200.00, not $440.00.
Hedging vs. Arbitrage: What's the Difference?
Arbitrage: You find an opportunity where two books' odds are already misaligned, and you bet both sides simultaneously from the start.
Hedging: You already have a bet in place, and you place a second bet later to reduce risk or lock in profit.
In practice with promos, we use hedging: you place your bonus bet (the promo), then immediately hedge it at another book to lock in profit.