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Sports Betting Tips: Should You Hedge A Parlay?

Written by Steve Janus

hedging-bets-010909 A question I am often asked is, “Should I hedge my parlay?” Well, first things first, I am not a fan of parlays as a mode of making money through betting on sports. Generally speaking it is not a good way to consistently turn a profit. With that being said, like so many things in life, parlays can be fun in moderation (and I’d be lying if I said that I didn’t indulge in a three or four-teamer from time to time).

What exactly do I mean by “hedge”?
If you’ve you bet on a few parlays in your day then you’ve no doubt been in a similar situation: You bet $10 on a 4-team parlay. At 10-1 odds you stand to make $100 if all four of your games hit, not bad. The games get started and you’re off to a great start. Your first three bets were easy winners, congratulations! The next game starts in about an hour and just think, you’re one win away from turning a $10 investment into $100 in just a few hours. But, “Ah-ha!” you say, “There’s a way for me guarantee that I make money now!” You’ve realized that if you hedge your bet you’re going to end up winning no matter what.

You see, you stand to make $100 if that final game hits, but if you hedge your bet by laying action on the opposite side of the final game you are going to profit as long as you bet more than your original $10 investment.

For example, say the Steelers are playing the Ravens in the final game of the night. In your parlay you have taken the Ravens +3.5. Instead of just crossing your fingers and hoping for Baltimore to cover, you could lay $55 (to win $50) on the Steelers to cover the 3.5. Now you’ve given yourself two possible outcomes, both of which would be a nice return on your $10 investment.

If the Ravens cover, great, you’ve won your parlay and the $100. So you’re sitting with $100, minus the $55 you wagered on the Steelers, for a winning balance of $45, a solid take.

Now what happens if the Steelers would have covered the spread? Obviously you are out your $10 wager, but you did cash in a $50 ticket on Pittsburgh, giving you a $40 profit on the day.

The Answer
So now you know how to hedge, the question is should you?

It might seem great in at first glance (free money, right?), but it does not maximize your potential profits. You have to give yourself about a 50% chance of winning that final game of the parlay, right? In the long term it would be more beneficial to ride the parlay out so you don’t lose the edge you’ve gained by increasing your odds (e.g. winning the first three games of a 4-team parlay).

Say you bet ten 4 team parlays at $10 a pop. By a miracle you win all three early games and have a chance to hedge your final bet in every situation. Using 50% as a base of about the percentage that an average sports bettor wins, what would be the results of hedging versus not hedging?

To Hedge
You’ve profited on every game, but lost your initial investment. A true hedge would net you about $42.50 on every parlay, a total gain of $425.

Or Not to Hedge
You hit 5 of your 10 four-team parlays (50%). You’ve lost $50 on the original parlay bets that lost, but won $500 as a result of the winners, a net gain of $450.

This may seem counter-intuitive at first, but when you sort it all out, the answer is pretty simple. Don’t hedge your bets on parlays!

There are rare exceptions to this rule, for example, if the Arizona Cardinals make the Super Bowl and you bet $10 on them to win the Super Bowl at the beginning of the season at 200 to 1, or something like that, it would be a good idea to hedge that wager. As for simple, everyday parlays, however, to maximize your profits, don’t hedge!

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Written by Steve Janus on January 9, 2009 · Filed Under Sports Betting Articles

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