Hedge Betting Calculator
Hedge Calculation Result
What is Hedge Betting?
Hedge betting, also known as arbitrage betting or "arbing", is a strategy used in sports betting to guarantee a profit regardless of the outcome of an event. It involves placing bets on all possible outcomes of an event with different bookmakers, exploiting discrepancies in their odds to create a risk-free profit. The core principle is to bet in such a way that the total payout across all bets is guaranteed to be more than the total stake.
The Math Behind Hedge Betting
To calculate whether a hedge bet is profitable, you need to determine the required stakes for each outcome. The formula relies on the total potential payout from each bet.
Let's consider a two-outcome event (like a tennis match between Player A and Player B).
* Stake 1: The amount you bet on the first outcome.
* Odds 1: The decimal odds for the first outcome.
* Stake 2: The amount you bet on the second outcome.
* Odds 2: The decimal odds for the second outcome.
The probability of each outcome, according to the bookmaker, can be expressed as 1 / Odds. For an arbitrage opportunity to exist, the sum of the implied probabilities for all outcomes must be less than 1 (or 100%).
The general formula to calculate the required stake for the second bet (Stake 2) to guarantee a profit when you have already decided on Stake 1 and Odds 1 is:
Stake 2 = (Stake 1 * Odds 1) / Odds 2
After calculating Stake 2, you can determine the total stake and the guaranteed profit:
* Total Stake = Stake 1 + Stake 2
Now, let's check the payouts:
* If the first outcome wins: Payout = Stake 1 * Odds 1
* If the second outcome wins: Payout = Stake 2 * Odds 2
For a profitable hedge, the payout for each outcome must be greater than the Total Stake.
The calculator automates these steps. It first checks if an arbitrage opportunity exists by summing the implied probabilities. If (1 / Odds 1) + (1 / Odds 2) < 1, then an arbitrage is possible. It then calculates the required Stake 2 based on the initial Stake 1 to ensure equal returns.
How to Use the Calculator
- Enter the
Stake(amount you are betting) for your first bet in pounds (£). - Enter the
Decimal Oddsfor your first bet. - Enter the
Stake(amount you are betting) for your second bet in pounds (£). - Enter the
Decimal Oddsfor your second bet. - Click "Calculate Hedge".
The calculator will then show the calculated required stake for the second bet to ensure a profitable hedge, the total amount staked, and the guaranteed profit in pounds (£). If no arbitrage opportunity exists, it will indicate that.
Example Calculation
Imagine you are looking at a football match where Team A is playing Team B.
- Bookmaker 1 offers odds of
2.20for Team A to win, and you decide to bet£100(Stake 1). - Bookmaker 2 offers odds of
3.75for Team B to win (or draw, assuming a two-way market for simplicity), and you want to hedge.
Using the calculator:
- Stake 1: £100
- Odds 1: 2.20
- Odds 2: 3.75
The calculator will determine:
* Implied Probability Sum: (1 / 2.20) + (1 / 3.75) = 0.4545 + 0.2667 = 0.7212. Since this is less than 1, an arbitrage opportunity exists.
* Required Stake 2 = (£100 * 2.20) / 3.75 = £220 / 3.75 = £58.67.
* Total Stake = £100 + £58.67 = £158.67.
* If Team A wins: Payout = £100 * 2.20 = £220. Profit = £220 – £158.67 = £61.33.
* If Team B wins: Payout = £58.67 * 3.75 = £220.01 (slight rounding difference). Profit = £220.01 – £158.67 = £61.34.
In this scenario, you are guaranteed to make a profit of approximately £61.33 regardless of the match outcome.