What is hedging a bet?
Hedging a bet means placing a secondary wager on the opposite outcome to your original bet, reducing your risk of a total loss. It trades some potential profit for security — you lock in a guaranteed return regardless of the final outcome.
Example of hedging
You bet £20 on Team A to win a tournament at 10.0 odds, standing to win £200. Team A reaches the final. Now you bet £80 on Team B (the opponent in the final) at 2.0 odds. If Team B wins, you win £160 on the hedge and lose £20 on the original — net £140 profit. If Team A wins, you win £200 on the original and lose £80 on the hedge — net £120 profit. Either way, you win.
When hedging makes sense
Hedging guarantees profit on a position that has moved in your favor. It also converts a large uncertain win into a smaller certain one. Mathematically, hedging reduces expected value (you give up some edge) but reduces variance. It makes sense when the certainty is worth more than the potential extra return, or when the situation has changed and locking in a return beats staying fully exposed.