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Bet Hedging Grows in Popularity

Bet Hedging Grows in Popularity - © Ssogras - Fotolia.com

In the last 5 years, online betting exchanges have dramatically changed the face of sports investing. It’s more than just their sudden rise to dominance. They have also enabled new trends in betting behaviours, such as bet hedging.

Bet hedging refers to the practice of offsetting one bet with a bet done in the opposite pattern. Essentially, it is backing and laying the same sports event. With offline bookmakers, this was not permitted, as it effectively wipes out a bookies profit. Also, it made no sense for a bookmaker to have a book full of balancing bets. They simply wouldn’t accept them.

With the online exchanges, however, it is now possible to back a match on betting exchange A and then turn around and lay that same match on betting exchange B. Massive arbitrage schemes are tracked down and stopped, but individual punters are still free to hedge as they like between the different players. There is no central clearing system between all players, so by having different accounts many things are popular.

Some of the bet hedging is driven by good old-fashioned risk aversion. With the economy looking grim and the stock market sucking the life out of savings accounts all over the country, protecting against losing even one’s fun money seems like a prudent path. This strong desire not to throw it all away is definitely a driver behind some of the protective behaviours.

Some of it is also driven by a greater understanding of the possibilities. With the online betting exchanges bringing the world of sports to life, there are suddenly opportunities to bet on all kinds of matches all over the world that previously wouldn’t have been available. This allows for higher volumes of all kinds of bets, and also for mix and match hedging.

Mix and match hedging is simply matching opposing odds, even if they are different sports. Again, hardly traditional betting behaviours, but something anyone can do now if they’ve the time and inclination. How much of it goes on is not known, but bookmakers are trying to watch for it.

Will bet hedging behaviours continue to increase in the sports investing world? It seems likely that they might, given that uncertainty isn’t going away any time soon. However, it is a time and data intensive hobby, so it is likely that only dedicated and reasonably attentive punters will make this strategy a part of their regular sports habits.

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