What is Hedging?
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 guarantee you won't lose everything — or even guarantee a profit if you do it right.
A Real Example
Imagine you placed a $100 futures bet on the Chiefs to win the Super Bowl at +500 (5-to-1 odds). If they win, you collect $600 total ($500 profit + $100 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 bet profit...
The Hedge:
Bet $300 on the Eagles (Chiefs' opponent) at +180 at DraftKings.
Chiefs Win →
+$500 from futures
-$300 from hedge
Net: +$200 profit
Eagles Win →
-$100 futures loss
+$540 from hedge
Net: +$140 profit
You guaranteed yourself at least $140 in profit — no matter who wins the Super Bowl.
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 guarantee profit.