Hedging

Hedging is the practice of placing a bet on the opposite side of an existing wager to guarantee a profit or minimize potential loss. It is most common with futures bets and parlays where a bettor has already won several legs and wants to secure a return regardless of the final outcome.

The decision to hedge involves a trade-off between guaranteed smaller profit and potential maximum profit. If you have a $10 parlay that needs one more leg to win $500, you could hedge by betting $200 on the opposite side. You either win $300 (parlay hits, minus hedge) or $200 (hedge hits, minus parlay), guaranteeing profit either way.

From a pure expected value perspective, hedging usually costs money because you are making an additional bet against the house edge. However, hedging can be rational from a utility perspective. The guaranteed profit from hedging may be more valuable to you than the higher but uncertain expected value of letting the original bet ride, especially if the amounts are significant relative to your bankroll.