Jun 10
14
The financial world has all kinds of hedging techniques and if you understand those it is sometimes easier to understand these hedging techniques, too.
In the gambling world, hedging effectively works by placing a bet on both sides of the equation. This won’t work on an evens bet because, of course, you will win on one side the same amount you lose on the other.
For example, if you bet $20 on one bet and $20 on the other side, you’ll come away with $20 no matter what. (Technically, you could lose money doing this because the bookie takes a little off the top for a fee).
Hedging will, however, work on bets which are odds on or odds against.
Here’s how to understand it:
Imagine that we have a bet of $20 on an event with odds of 5.0.
$20 at 5.0 on Team A = $100
That means we’ll lose $20 if Team A loses but we’ll win $80 if Team A wins. Sounds good so far?
Now imagine that the second team, Team B, has odds of 2.0
What should we do to hedge?
We place $50 at 2.0 on Player B. That way, we’ll win $50 if the team wins and we’ll lose $50 if the team loses.
With me so far? Some people balk at this point and say, “Why would I want to be willing to lose $20 on Team A and $50 on Team B? Here’s why:
Think about what happens if Team A wins:
You’ll get $80 profit for your Team A bet and you’ll lose $50 for your Team B bet. Total win? $30.
Now think about what happens if Team B wins:
You’ll get $50 profit from your Team B bet and you’ll lose $20 for your Team A bet. Total win? $30.
Did you catch that? You win the same amount no matter what. And with these numbers, $30 is not a bad win.
This has been an excerpt from Robert Thatcher’s flagstaff manual, the Statistical Betting Guide.
Sun Tzu said: “If you know the enemy and know yourself, your victory will not stand in doubt”. Making money with sports betting has nothing to do with gambling. Do you want to learn the secret methods successful bettors apply each and every day?
Robert Thatcher explains in easy words how to make money with sports betting. Download your copy at http://www.statisticalbettingguide.com.