Betfair Hedging
If you have heard of the term ‘hedging your bets’ then this calculator will allow you the opportunity to do precisely that.
This is also called “hedging” or “arbitrage” where you try to profit from odds fluctuation. At various betting exchanges (e.g. Betfair) it is possible to bet ON a team (“back”-bet) and, in case the team goes into the lead, to bet AGAINST the team (buy a “lay”-bet or sell the bet) and thus hedge against any outcome in the game. In betting exchange trading terms, hedging is a strategy that involves placing an additional bet (or bets) on a different outcome (s) to your original bet to ensure that you secure a guaranteed profit regardless of the result or, at the very least, reduce your risk on a. Here's how to use the hedging calculator for trades in which you lay first, for example, LTD: Click the 'Laying First' button. Enter the 'Lay Price' (decimal odds), 'Lay Stake' and 'Back Price' (decimal odds). Enter a value for betting exchange commission if you wish. Successful Cash Out (Hedging) on the Betfair website. The website tells me that the Cash Out was successful and now I have a small loss of £5.05 on all horses. The loss is slightly lower than you can see in the previous screen because prices always change on the exchange. I was lucky to get a slightly better price during the process.
The Hedge Bet Calculator (also sometimes known as the Lay Calculator) is a way of betting on both markets (to win and not to win) in such a way to ensure that regardless of the outcome, you will make a profit.
How to use the Hedging Bet Calculator
There are three sections to the Hedging Bet Calculator and we’ll explain how to complete each one below:
Top Section: Entering Bet Details and Commission
In this top section of the calculator, you need to enter in the bet details and also whether the bookmaker charges any commission on backing (which is unusual – hence the default setting of 0%) or laying (which is more common, usually between 1% and 5%) a selection.
In the first box, you enter details of the price that you backed the selection to win, which must be entered using decimal odds format (so odds of 2/1, would be entered as 3.0).
After that, you enter in how much you have staked on that selection to win.
In the next box, you enter what the lay price of your selection is once again in decimal format; this is the price you are backing the selection not to win at.
Once you have entered that price, you then need to enter any commission that you would need to pay to the bookmaker when backing (in the Back box) or laying (in the Lay box). You do this simply by selecting the appropriate percentage rate from the dropdown box.
It is important that you do state the correct commission percentages for both boxes as incorrectly entering them could potentially leave you out of pocket.
Betfair Hedging Formula
The great thing about this Hedging Calculator is that once you have entered all the details, the calculator automatically updates, showing you all the information you need to know in the two sections below.
Middle Section: The Results
The middle section of the Hedging Calculator displays the main results of the data you have entered in the top section.
The first box details how much money you should lay in order to ensure you make a profit on the event in question. The second box shows you how much profit you would be guaranteed to make on the market overall, if you back the selection and lay against it.
This information is summarised in the next two boxes. The Total Staked box outlines how much you would need to wager in total on backing and laying against the selection, while the guaranteed return box, shows you how much you’d win if your lay against selection wins.
The Bottom Section: The Summary – Profit / Loss
The final section of the calculator simply summarises what your profit and liabilities are for each possible outcome of the event you have decided to back and lay against a selection in.
In the first section, Wins, this outlines how much money you would win from the bookmaker from backing your selection, together with how much you would lose from laying against that selection winning.
The second section, Losses, shows how much money you would make if your backed selection does not win (Lay Profit), together with how much you would stand to lose (Back Liability).
Betfair Hedging Stocks
In both cases, you should find that the Back Profit and Lay Profit columns offer a positive return over the liability columns. If they do, then regardless of the outcome of the event in question, between your two wagers, you will turn a profit.
