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п»їWhat is Hedging in Sports Betting?
Hedging is a strategy every sports bettor should be aware of. In fact, some bettors have engaged in hedging without knowledge of the term as it relates to betting.
“A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment” Source: Wikipedia “hedge your bets. to protect yourself against loss by supporting more than one possible result or both sides in a competition” Source: Cambridge English Dictionary.
Hedging is a financial risk management strategy popular in the trading of commodities. In the sports betting world hedging is sometimes frowned upon but remains a sound strategy for the more risk-averse. Hedging is when you essentially find a middle and bet on both sides. This can be done via live betting when and if you fear the outcome may go the other way. It can also be done on the last game of a mutli-contest parlay. In this case, you will bet against yourself to ensure some winnings. Generally, this calls for a moneyline bet or spread bet against the final outcome you chose on your initial ticket.
Hedge payout should at least cover your initial bet, and in most cases help you turn a profit regardless of the outcome. Hedging differs from arbitrage in that you are placing these wagers at the same book, rather than looking for line discrepancies to exploit across different books.
Example: $20 parlay, six teams, payout $800.
In this example, the last game of the night starts after the first five have already been completed. You have won the first five bets on the ticket and start to worry with one game left. In order to ensure you walk away with some winnings for the night, you place a $200 wager on the Philadelphia Eagles. If the New Orleans Saints win you will now collect $800 on the parlay. You have to deduct the $200 for the bet on the Eagles. If the parlay fails to hit, however, you will still walk away with $200 minus the $20 for the parlay wager.
Hedging insures your opening wager and a portion of your winnings. It, of course, limits your financial upside and thus is not a strategy utilized by every bettor. This is a tool bettors should utilize wisely.
Raju Byfield is a featured writer at BettingPros. For more from Raju, check out his archive, and follow him @FantasyContext .
Hedging a Bet in Sports Betting.
What the heck does a hedge have to do with sports betting? A row of bushes or small trees planted close together that sometimes forms a fence or boundary seems to have very little to do with wagering money on a game. Well, by this definition, it has nothing to do with sports betting. Unless maybe some prop bet is being placed on the Stanford Cardinal mascot.
Discussing shrubs is a lame way of introducing hedging in sports betting, but it doesn’t take from away its importance. Hedging is a massive part of becoming a successful sports bettor.
What is hedging?
It is critical to understand what hedging a bet actually means before even thinking of profiting from it. Hedging a bet means placing a bet or bets on a different outcome or outcomes, subsequent to an original bet, in order to create a situation where there is a guaranteed profit whether the original bet wins or loses.
For example, say a $100 bet with even odds was placed on the Green Bay Packers to win vs the New England Patriots. A Packers win would net a $100 profit. The Patriots may have started as slight favorites to win, hence the Packers having even odds. But, say the Packers hop out to a nice 17-0 halftime lead. All of a sudden, the odds are going to swing majorly in the Packers’ favor.
Hedging can be incredibly profitable and risk-reducing. The Packers and Patriots example is just one easy way to explain what it is. Many more effective examples of hedging exist.
When to Hedge.
Sports betting never stops. Sports betting never stops for expert bettors, that is. The old adage that “you should bet it and forget it,” is far from the truth. So, when are the best times to hedge a bet?
Futures Future bets are the perfect opportunity to hedge a bet and limit risk, yet still profit. Quite simply put, a hedge bet becomes more logical as the original futures bet gets closer to winning. Take, for example, a bettor placing a $100 bet on the Los Angeles Rams to win the Super Bowl before the season starts. This type of bet would obviously have a high risk, but would also have a high payout. (In reality, in 2018, a preseason $100 bet on the Rams to win the Super Bowl would net about a $1,500 profit.) If the Rams don’t make the playoffs or lose early in the postseason, the bettor is out of luck. But, if the Rams make it to the NFC Conference Championship or the Super Bowl, it’s time to consider a hedge bet.
With about a $1,500 profit on the line, the bettor has some wiggle room. Say the bettor decides to wait until the Super Bowl to hedge. The bettor can then take any money from that potential $1,500 profit and place it on the opponent, knowing that one of the two teams has to win. Especially if the Rams are favorites, this guarantees the bettor a very nice profit, regardless of the outcome.
Parlay Bets Parlay bets are the next most common type of bets to hedge. A parlay bet is a series of single bets that link together and is dependent on all of the wagers winning. A much higher payout is received if all the wagers are won than would have been received if the bets were placed individually. They also might be the easiest type of bets to explain hedging with.
The higher the risk/reward for a parlay bet, the more likely a bettor should be to use hedging. Most small, low-risk parlay bets should not be hedged. On the other hand, hedging should always be taken into account with a high risk/reward parlay.
Obviously, the further along a parlay bet reaches, the higher the odds of winning become. Take a four-bet parlay, where the first three bets win. The bettor now has to win only one more wager to net the whole parlay profit. Under this scenario, a hedge bet placed on the opposite outcome than what the parlay needs to win makes sense.
With a Change in Opinion Changes in opinion can also constitute a time to hedge. The next bettor who has a change in heart will be far from the first, or the last, to have ever done so. Especially in long-term bets, opinions, preferences, and even players and teams change. Sometimes, these elements change before the odds do. A hedge bet is not smart if the odds are so bad that the bettor is still guaranteeing themselves a large loss either way. Again, things can change quickly in sports. But, if the odds are still there, hedging a bet based off of a change in opinion can be useful.
Live, In-Play Bets Live, in-play bets are one final way hedging can be used. Any live, in-play bet just means a wager on a game that is currently taking place. The Packers and Patriots scenario from above was a perfect example of this. Any point in a live game wager where the odds of a hedge bet can guarantee the bettor a profit, hedging should at least be taken into consideration.
There isn’t always a right or wrong way to use hedging, and that’s why it’s tricky. It’s perfectly acceptable to let a bet ride all the way to its completion, win or lose. It’s also perfectly acceptable to hedge a bet and guarantee a profit, albeit a smaller one. Tools and calculators exist to help figure out the best times and opportunities to hedge. Some experts will say to hedge when a certain amount or percentage of a profit can be guaranteed. What’s possibly the best advice? Judge each and every situation by its own characteristics. A bettor could hold off on hedging if she has the utmost confidence in her bet. On the flip side, a bettor could pounce on an opportunity to hedge if he feels as if he’s gotten lucky. Each and every bet has its own unique characteristics and should be treated as such.
Regardless of the situation, the most experienced sports bettors always have hedging as an option on the table. With almost any type of bet, hedging is a strategy that can not only help net a solid profit but can also alleviate all risk.
Alex Altmix is a featured writer at BettingPros. For more from Alex, check out his archive .
How to Bet NFL 2nd Half Lines.
How to Bet NFL 2nd Half Lines.
Although most of the football strategies I discuss in this space involve betting on the full game line, there are a myriad of ways that bettors can find value and maximize their investments. One method that I don’t often mention is second half betting, which can be utilized to create middling opportunities for anybody looking to mitigate their risk.
For anybody who is unfamiliar with the concept of second half (2H) betting, it’s actually quite simple. Whenever a game goes into halftime, oddsmakers will quickly post lines for the second half of the game. This solely reflects the outcome of the second half; not the final score. These lines are only available for 15-20 minutes and this short time frame creates a unique opening for bettors.
Sportsbooks have limited time to set second half lines, and they’re typically being forced to set several lines simultaneously. This is the oddsmakers worst nightmare. With limited preparation time and an inability to pay close attention to every ongoing game, oddsmakers are more likely to make mistakes that can be exploited by sharp bettors.
My past research found that a majority of NFL bettors have taken the favorite in roughly 80% of all regular season games played in the past 13 seasons, and this has historically created value on underdogs for the full game spread. We have also found that betting against the public — particularly teams receiving less than 25% of spread bets — has been highly effective.
Unfortunately, there are significantly fewer bets placed on the second half line as opposed to the full game line, and that decreased volume adversely affects most of our contrarian strategies. As you can see from the table below, betting against the public has not been an effective strategy for second half bettors.
Since the start of the 2003 NFL season, second half underdogs have gone just 1,348-1,367 (49.7%) in regular season games. However, I found that home field advantage continues to be overvalued by casual bettors. Over that same time period, road teams have gone 1,400-1,294 ATS (52.0%) on the second half spread.
It’s worth noting that although second half underdogs have struggled, there has been value taking big second half вЂdogs. Contrarian betting means going against the grain and buying on bad news, which includes backing the perennial cellar dwellers and fading the league’s top teams.
Using Bet Labs software, I found that second half underdogs of at least 7-points have gone 131-90 ATS (59.3%) in regular season games. That win rate improves noticeably in conference games, where the familiarity between teams levels the playing field.
The win rate for teams fitting these criteria is slightly higher for road teams than home teams, but it has been profitable regardless of venue. I should also point out that most of these past matches were large underdogs on the full game spread who were winning at halftime. In fact, 63.3% of these past matches were double-digit underdogs on the full game spread while 68.3% outscored their opponent in the first half.
This was an important development because my analysis on NBA second half betting found that public bettors will almost always gravitate towards the team that’s trailing at halftime — especially if they were favored on the full game spread. When the favorite is losing at halftime, their second half spread will always be more attractive than the closing full game spread.
Casual bettors believe they’re getting an excellent number at halftime — one that wasn’t even available before the game. However, they don’t seem to concern themselves with the first half results. If the Patriots closed as 10-point favorites and they’re losing by 7-points at halftime, the second half line may open New England -7. For many bettors, it’s tantalizing to take an elite team as a pick ’em when the closing line was ten points worse. This is flawed logic since each half needs to be treated as a separate event.
I believed that based on this tendency and the ability of oddsmakers to shade their lines to account for public perception; there would be tremendous value taking second half teams that are leading at halftime.
After sorting through our historical archive, I found that there has been a direct correlation between large first half leads and higher winning percentages. The table below examines the performance of teams that are winning at halftime using several key numbers for football bettors.
For the sake of comparison, I chose to examine two different criteria:
First half margin: The team’s margin of victory in the first half First half spread margin: The team’s margin of victory as compared to the first half spread.
First Half Margin.
First Half Spread Margin.
It’s interesting to note that for both the first half margin and first half spread margin, there’s a direct correlation between larger halftime leads and an increased return on investment (ROI). That goes against the popular belief that teams who struggle in the first half are likely to make the necessary halftime adjustments or score a meaningless, last minute touchdown to pull off the backdoor cover.
We already knew that favorites have offered a slight value on the second half line, but what happens when that favorite is also winning by at least 10-points?
Scott Cooley, an Odds Consultant for the market-setting Bookmaker.eu, helped provide some insight into public betting patterns. “In general, public bettors do side with the team that is trailing, and it becomes an overwhelming majority if the trailing team was favored to begin with,” said Cooley. “The square player is usually hesitant of backing the team up big because they’ve already missed a better number.”
Essentially, casual bettors are unwilling to take big favorites on the second half line because they feel like they already missed their opportunity and/or they are unwilling to double down on their original bet. They may also be more hesitant about taking second half favorites with a large lead because they are looking for a middling opportunity.
As an example, let’s say you have already bet on the Seattle Seahawks (-6.5) against the Los Angeles Rams. If the вЂHawks are leading by 14-points at halftime, you’re in great position to win your bet — but there’s always the chance that Rams turn things around and cover the spread. However, you can easily mitigate that risk by betting the second half line.
Since bettors are likely to take the favorite on the full game line, it is increasingly likely that they will take the underdog on the second half line in order to create this middle opportunity. That said, oddsmakers won’t typically adjust their second half spreads to prevent middling opportunities.
“Middles will be available at halftime regularly so we won’t shade based on that opportunity,” according to Cooley. “Where we might shade is if we have a ton of liability on one side of a spread or total. Also, we may shade a bit if a sizeable favorite is losing.”
This was an intriguing statement because favorites that aren’t winning at halftime have gone just 563-590 ATS (48.8%) since 2003. When they’re favored by at least 6-points on the full game spread, the record drops to 177-221 ATS (44.5%). When they’re favored by at least 10-points, the record drops to 49-73 ATS (40.2%). By simply betting against these sizeable favorites, second half bettors would be able to capitalize on these lines that have been artificially inflated to account for public perception.
To summarize, these are three of the most effective strategies for NFL second half spread bettors:
Take large second half underdogs. Take teams that are winning big at halftime. Fade big pre-game favorites that are losing at halftime.
It’s true that there are substantially fewer bets placed on the total as opposed to the spread, but there’s still tremendous value for opportunistic second half bettors. Since 2003, second half overs have won at a 50.3% rate. When the opening second half total is 20 or less, that win rate improves to 53.1%. When the first half total didn’t go over, that win rate leaps to 55.5%.
Historically there has been more value betting overs when there’s a low total, and that trend persists on the second half line. We always stress the importance of buying on bad news to capitalize on the public’s tendency to overreact to recent events, and clearly bettors assume that a low-scoring first half is an indicator of a low-scoring second half. Contrarian bettors can capitalize on this sentiment by taking the over after a low-scoring half.
All of the trends and systems mentioned are available in the Bet Labs Think Tank , and can be copied by any active subscriber. Skeptical about signing up? Our readers can create up to five different NFL spread systems for free!
We don’t offer second half odds on our free NFL odds page, but that information is available to Sportsbook Insider subscribers. Interested in viewing real-time odds, public betting trends, Best Bet picks, Bet Signals and countless unique sports betting tools? Take Sports Insights for a test drive by signing up for a 4-day Pro trial.
How to Bet NBA 2nd Half Lines.
How to Bet NBA 2nd Half Lines.
We don’t discuss it very often, but NBA bettors can regularly find value by taking second half lines. For bettors who have already taken the full game spread, there are frequently opportunities to hedge your bet and create win-win situations. That is more commonly known as middling.
What’s particularly interesting about this bet type is that oddsmakers have limited time to set second half lines, and often times they’re being forced to set several second half lines simultaneously. This means that the lines can more easily be exploited.
We have discussed ad nauseum how oddsmakers account for public perception by shading their opening lines and forcing casual bettors to take bad numbers when they play the popular side of a game. Square bettors have overwhelmingly preferred taking favorites, which has historically created value on the underdog. We wanted to determine whether any of these contrarian strategies could be applied to second half bettors.
One issue is that there are significantly fewer bets placed on the second half line as opposed to the full game line. That posed a problem since the value derived from betting against the public is directly correlated with the number of bets placed on a game.
Although betting against the public produced a winning record for second half bettors, it was still well below the 52.38% break-even point.
REGULAR SEASON RESULTS.
When asked about how public betting on the second half line changes from the regular season to the playoffs, Cooley said, “In most cases the playoffs garner more action because they are more viewers tuning in.” He went on to say that they take, “quite a bit of sharp action on second half lines, particularly games that are not nationally televised.”
This revelation was fascinating for two reasons: not only did their handle increase during the postseason, but sharp bettors are less prone to wager on games that are nationally televised. We believed this development would make it more advantageous to bet against the public on second half lines during the postseason.
PLAYOFF RESULTS.
We believed that based on this tendency, there would be value fading large favorites that are trailing at halftime. Alas, that theory proved entirely misguided. Since 2005, double-digit favorites that are losing at halftime have gone 243-224 (52.0%). When those same favorites are trailing by at least ten points, that record improves to 54-32 ATS (62.8%) . This is one of the rare instances where the public’s instincts are right, although we should note that there has only been one past system pick during the playoffs.
It was interesting to find that large favorites have been incredibly profitable when they’re trailing big at halftime, but we wanted to examine more general trends. More specifically, we wanted to ascertain whether bettors are more apt to place a halftime bet on the team that’s winning or the team that’s losing.
Our research found that the team that is winning at halftime receives a majority of second half bets in just 39.1% of all regular season games. During the postseason, that number drops to 36.1%. We believed that oddsmakers would shade their lines to account for that public betting, which would create value for opportunistic bettors — especially when the volume ticks up in the playoffs.
Based on our contrarian strategy, we believed that it would be profitable to bet against the public and take teams — specifically those getting points — that are winning at halftime. The table below displays the record for second half underdogs that are trailing at halftime during the regular season and postseason.
Although there’s a winning record during the regular season and postseason, it’s clearly been a far more profitable strategy during the playoffs and that’s hardly surprising. Bettors already believe that whichever team is trailing is a good bet to come back, but that belief is amplified during the playoffs. That sentiment leads to artificially inflated lines that bettors can exploit.
Let’s continue with our earlier example involving the Atlanta Hawks and Cleveland Cavaliers. If the Hawks are leading at halftime, but they’re a large underdog for the game, it’s a near-certainty that they’ll be an underdog on the second half line. The betting public will likely gravitate towards the Cavs, regardless of the line, because they believe the “better” team will make the comeback. Oddsmakers understand this tendency and will shade their lines accordingly. That’s particularly true during the playoffs when there’s typically only one game being played at a time.
These results confirmed our initial hypothesis, but there was still something troubling. Our previous research found that favorites had covered the full game spread at a 51.5% rate during the postseason. When they were receiving limited public support, that number increased dramatically. If favorites had been so profitable, how were second half вЂdogs posting such impressive returns?
Our first thought was that there wouldn’t be many instances in which the full game favorite is winning at halftime, but listed as an underdog on the second half line. However, further analysis found that 70.6% of teams fitting these criteria were winning by double-digits at halftime. That led us to the conclusion that oddsmakers are concerned by potential middling opportunities. According to Cooley, halftime hedging is “certainly something we consider, particularly if we have a large liability on one side of the total or spread.”
Since sportsbooks are worried about bettors creating these freeroll opportunities, they’re willing to shade their lines in an attempt to mitigate their risk. If the favorite is winning big at halftime, bettors are more likely to bet on the team that’s losing in order to create a middle. Here’s another quick example:
The more we thought about this possibility, the more we thought that it would be a lucrative strategy. There’s no reason to think that teams would take their foot off the petal during the playoffs, so bettors would have the opportunity to take the better team as an underdog, at an inflated price.
The screenshot below displays the system’s performance over the past eleven years:
Most of the team’s fitting this system have been favorites with substantial halftime leads, and bettors are often dubious about taking either side of a blowout. “More often than not, the public isn’t interested in betting on a massive number” according to Cooley. “This is true for most sports.”
Bet Labs users are able to copy this system directly from our Think Tank to receive all current game matches for this system and many others. Bettors are also able to view the latest odds and trends from our free NBA odds page.
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