Hedging Calculator - How to Calculate Hedge Betting Stakes - HowToBet

Hedging Calculator: Learn how to hedge bets

 how to use calculator hedging for trading markets

Hedging is a sports betting technique that has been used for decades. However, it is one that only the most experienced bettors used to use. That was due to the potentially complicated calculations that are involved. Fortunately, times have changed. Bettors can now get computers to do many things that would take many times longer when done the old-fashioned way. Our Hedging Calculator for sports betting is a perfect example of that.

In this article, we’ll introduce the concept of hedging and give you a brief overview of how it works. We’ll then explain how to use our Hedge Calculator to quickly calculate the stake required in any given scenario. A full explanation of how you can perform your own hedging calculation will follow. And then we'll share some thoughts on how to put the technique of hedging to good use. Finally, we’ll answer some of the most commonly asked questions about the subject in a FAQ section.

What is Hedging?

Hedging is the act of placing two or more bets in the same market. It is often used to adjust a position relating to a previously made bet in that same market. This is a technique that can help you to reduce potential losses or even to guarantee an overall profit even when the event is still running.

A Hedging Example

For example, let’s imagine that you have previously bet $100 on a tennis player to win a match at odds of +150. Your selected player performs well from the start of the game and wins the first two sets easily. As a result, the online sportsbook would obviously shorten the odds on that player whilst also extending the odds on the other player. Let’s say that they extend those to +300.

In this situation, you might want to bet $50 on the opponent at odds of +300. That would hedge your earlier position so that you can’t lose. 

  • If your original selection wins you’d get $250 back from the sportsbook ($150 profit plus your $100 stake).
  • If your second selection wins you’d get $200 back from the sportsbook ($150 profit plus your $50 stake).

Your total outlay for both bets combined is $150. That means you’d make a profit of $100 if your original selection wins, and a profit of $50 if the opponent makes a miraculous comeback. Either way, you win, and the match isn’t even over yet!

The Problem of Calculation

The same hedging technique can also be used to limit your potential losses, so it should be clear that hedging is a very useful tool to have at your disposal. The main problem with hedging is that you need to know how much to stake to get a known return. And because the available odds can change quickly as the event unfolds, you need to be able to perform the required calculations at speed without sacrificing accuracy.

How to Use the Hedging Calculator

Our Hedging Calculator has been developed to help make calculating required stakes as easy as possible. All it requires is a little information about your original bet and the available odds for the new bet you want to make. The calculator will then tell you how much you need to stake so that you get the same overall return no matter which bet wins.

Using the Hedging Calculator is easy, but here’s a step-by-step guide to walk you through the process for the first time:

Step 1 - Enter Original Bet Details

First, you need to give the calculator the essential details it requires about your original bet. Only two pieces of information are needed, and those are the odds of your original bet and the amount of money that you staked on it. Enter the odds in American format (use our Betting Odds Converter if needed) and then the amount of your bet in dollars.

Step 2 - Enter the Hedge Bet Odds

Next, you should enter the odds of the bet that you want to place for hedging purposes. Again, the American odds format should be used.

When you have completed both of those steps - something that will take a matter of seconds - our Hedging Calculator will display the results. You will be shown how much you need to stake on the hedge bet to achieve the same total return whichever bet wins.

Using our Hedging Calculator with the example provided earlier, we would enter +150 for our original bet odds and $100 for our original bet stake. We would then enter +300 for the hedge bet odds. The calculator would then tell us that we need to bet $62.50 on the hedge bet. This would create a scenario in which we would receive $250 back in total from either bet if it wins, giving us an overall profit (after deducting our $162.50 outlay) of $87.50.

How to Calculate a Hedge Stake Manually

Because the odds in an ongoing event can change rapidly, manually calculating hedge stakes is rarely practical. However, knowing how to do so might be useful in an emergency, and it will give you some idea of what our Hedging Calculator is doing for you every time you use it. Here, then, is how to calculate a hedge stake manually.

First, calculate the total return that you would get if your original bet wins. To do that, simply add the profit would get to the amount you staked. If you have bet $100 at odds of +150, your total return would be $250.

Next, make sure that you have the odds of the hedge bet you want to make in decimal format. Use our Betting Odds Converter to help you if necessary. If you want to make a hedge bet at odds of +300, our Betting Odds Converter will tell you that the decimal equivalent is 4.

Now divide the total return from your first bet by the decimal odds of the hedge bet. In our example, we would calculate $250 / 4 = $62.50.

You would therefore need to stake $62.50 on the hedge bet. This is, of course, the exact same stake that was advised in the same scenario by our Hedging Calculator.

Potential Hedging Calculator Applications

You can use our Hedging Calculator to help you apply the technique of hedging in a variety of ways. The use of the calculator itself will always be the same, but the aims of doing so can vary from market to market. Here are just a couple of ideas to get you thinking along the right lines.

To Lock In a Known Profit

In the example used throughout this article, we used the Hedging Calculator to help us lock in a known profit. As in the example, this can be very useful when your original bet is in a very good position to win, but you want to be sure that you get a return no matter what happens. Those of you who have been sports betting for a while will appreciate the fact that no event is truly over until it’s over, and some comebacks have cost bettors dearly. Locking in current profits is a very useful way of avoiding that risk.

To Reduce Potential Losses

Hedging can also be used to help you reduce potential losses in a given market. Consider a scenario in which you’ve placed a bet on a particular basketball team, but then you realize that your team isn’t playing as well as you’d hoped. In that case, you could either hang on and hope that the team improves, or you could choose to cut your losses by placing another bet on the opposing team. This would usually ‘lock in’ a known loss, rather than a profit, but that loss wouldn’t usually be as great as the size of your original bet.

Hedging Calculator FAQ

What is hedging?

Hedging is the act of placing a bet on two or more outcomes in the same betting market. The aim is either to lock in a known profit, increase your chances of winning (as when betting on two or more horses in the same race) or reduce potential losses.

Is hedging the same as arbitrage betting?

No. Hedging is the act of betting on two or more outcomes in the same event, but it doesn’t always guarantee a profit or a winner. Arbitrage is betting on all possible outcomes in an event, usually with several sportsbooks, to achieve a small but certain profit no matter what happens.

What events can I use the Hedging Calculator on?

You can use our Hedging Calculator for any sporting event you choose. All you need are the details of your original bet and the odds of the hedge bet you want to make.

What are the best events for hedging?

There is no ‘best’ event for hedging. The technique is as versatile as it is effective, so it can be applied to a wide range of sports with equal benefit.

Is hedging a common approach to betting?

Hedging is an advanced approach to betting, and so it isn’t one that is used by everyone by any means. That said, an increasing number of bettors are becoming familiar with the technique, and its use is therefore becoming a lot more common than it used to be.

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