Hedging and Trading

Terms more regularly associated with the financial markets, the advent of betting exchanges has made such roles possible in the sports markets, and understanding these two key areas can make a big difference to your bottom line.

Hedging in Betting

The term ‘hedging’ simply refers to creating bets where changes in one price are taken into account by other bets, thus hedging your choices and making your life much simpler if there is a large scale movement in the market. Say you want to bet on a massive outside in a horse race a few weeks before the race starts You can get them at 100 to 1 this far before the race, and decide to make a bet. As the race nears, the price falls dramatically as the horse seems in good form, and drops down to 25 to 1. Instead of having to still take the risk of backing a 25 to 1 horse, you can simply lay the horse to lose with the profit from the back, thus hedging your bet and taking the still large scale risk out of the equation.

Trading in Sports Betting

This process is generally called ‘trading’ and works on the basis that you are largely betting on likely market moves rather than results. As you are nearly always closing your positions before the result is out, the actual winner or loser becomes irrelevant, as your money is made trading positions on the direction the market moves, rather than picking winners.