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Hedging
What Is Hedging?
Hedging is a technique where a player will place bets on other possible outcomes of an event in order to prevent oneself from losing money, or perhaps even lock in some profit. When a bet has been placed, the player's position is currently exposed (as they will lose their money if the bet loses). By placing a bet on the other possible outcomes (hedging), the player will no longer lose their money if the bet loses.
In Matched Betting hedging is generally used to unlock free bets and bonuses from bookmakers with little to no risk. It can also be used to profit from said free bets, as well as a means to lock in profit from sports arbitrage.
Example
Andy Murray is playing Rafael Nadal at Wimbledon. The odds of both players are 2.0, as they are evenly matched and it's basically a coin flip on who wins. You may go to Bookmaker A and place a £10 bet on Andy Murray. This £10 is now at risk, because he may lose.
To "hedge", would be to go on another website, Bookmaker B, and place a £10 bet on Rafael Nadal. This way, you will win £20 on Bookmaker A, or £20 on Bookmaker B (depending on the outcome), therefore losing no money.
Here would be the possible outcomes.
| Andy Murray Wins | Rafael Nadal Wins | |
|---|---|---|
| Bookmaker A | +£10 Profit | -£10 Loss |
| Bookmaker B | -£10 Loss | +£10 Profit |
| Overall Position | £0 Profit/Loss | £0 Profit/Loss |
Lay Bet
A Lay Bet is when a player bets on something not to happen. It's essentially the opposite of a regular bet. Instead of betting on a team or player to win, a player bets that they will lose or not succeed.
For example, if you think a team won't win a match, you can place a lay bet against them. If they lose or draw, you win your lay bet.
Lay bets are only placed on betting exchanges, as bookmakers don't tend to offer this type of bet.
Dutching
A dutch bet, or "dutching" works very similar to the aforementioned lay bet. Instead of placing a lay bet, a player will simply place back bets on other possible outcomes within an event.
An example of a dutch bet can be found further up in this article.
Dutching isn't really common practice when Matched Betting as it involves using multiple bookmakers as opposed to using one bookmaker and one exchange. The reason for this is that bookmakers generally have poorer odds than the exchange due to them having to factor in their own margin. However it can still be useful to know this technique, especially when a bookmaker has an event priced too high.
Sources/Credits