HEDGING YOUR BETS – 3 TIMES TO DO IT
Note: This is part 2.
I previously explained why hedging your bets is usually a bad financial decision.
You are usually paying vig/juice/commission twice and are often getting the inferior side of the bet. In the long run you are paying extra fees for no reason.
However, there are 3 situations where hedging your NFL (or any sports) bet may make sense:
1 – You bet the Seahawks in September 2014 at 10-1 to win the Super Bowl. You bet 1k and stand to cash $10k. They are now pick’em in the Super Bowl, so you can lock in $4750 (half, less VIG). Why lock in this profit? ONLY if your financial situation changed over the course of the NFL season. This could occur for a few reasons:
A: a degenerate you know who owed you 4k failed to pay and you are tight for cash
B: your girlfriend got pregnant and you ‘decided’ to start a family
C: you went through a horrible (yet inevitable) losing streak and are bankroll tight.
Paying the fees for financial stability may make sense.
2 – Your in Las Vegas during the NFL season and decide to bet 5 different parlay cards, all 5 cards are 5 teamers and all end with the a bet on MNF. You box the 1st 5 teams meaning each of your 5 cards has 5 of the 6 teams on it and the Lions, so if any one of the 5 loses you are alive for a 5 teamer on MNF. The parlay cards all pay 20-1 and you invest $250, $50 on each card, hoping to have $1k ($50 bet x 20-1, 1 card alive) going on MNF for the end of your Vegas trip, figuring winning 4 of 5 NFL games ATS (against the spread) is tough. Lo and behold, they all win so you have a much higher amount, $5k going on MNF. Betting a thousand or so the other way, given the unusual circumstances that you won all 5 (5x easier to win 4 of 5), may make sense to reduce volatility, but isn’t optimal.
3 – You bet an NFL team +3.5 and they are up 14-7 at the half and are +5 in the 2nd half. But, you watched the game and think they are lucky to be up – maybe tipped balls, turnovers, special teams, etc. If the game circumstances have changed and you can unwind your bet with a potential premium, it may make sense to hedge.
While hedging usually costs you money, the specific situations described above (or similar ones that make sense to you) may be notable exceptions. Drastically reducing volatility when bankroll management is an issue or when game circumstances change are situations where hedging may make sense.
need a refresher on the terms? See our glossary of terms.
need a refresher on the odds and how they work? See explaining the odds.
Also published on Medium.