Hedging Bets Explained (Australia 2026)

You backed a team at 15.00 early in the season and now they are in the grand final. Your potential payout is enormous, but so is the risk of walking away with nothing. Hedging bets is the strategy that lets you extract guaranteed profit from that position before the event settles - regardless of what happens on the day.

Hedging is not just for futures, though. Australian punters hedge live during in-play markets, on the final leg of a multi, and even across bookmakers when prices diverge enough to lock in a risk-free return. Understanding when and how to hedge is one of the most practical skills a serious punter can develop.

This guide covers the complete hedging toolkit: the formula, worked maths, a comparison with arbitrage and cash-out, the EV trade-off, and how DegenToPro tracks your open positions so you always know your hedge options in real time.

What Is Hedging a Bet?

Hedging a bet means placing a second bet on the opposing outcome to your original wager. The goal is one of two things:

• Lock in a guaranteed profit - both outcomes now return a positive amount, so you profit no matter what.
• Reduce risk - you accept a smaller potential profit (or a small loss) on one outcome in exchange for eliminating the risk of losing your full original stake.

The classic scenario involves a long-shot futures bet that has come alive. You staked $50 on a team to win the premiership at 20.00 odds. That team is now in the final and the in-play or updated market has them at 1.80. Your $50 is now sitting on a position that could return $1,000 - or nothing. Placing a hedge bet on the other finalist at the right stake can guarantee you walk away with a profit regardless of the result.

Hedging is perfectly legal and widely used by recreational and professional Australian punters alike. The mechanics are straightforward once you know the formula.

When to Hedge: Futures, Live Betting and Big Multis

Not every bet is a good candidate for hedging. The three situations where hedging makes the most practical sense for Australian punters are:

1. Futures Bets That Have Come Good

Season-long futures - premiership markets, grand final markets, NRL or AFL season bets - are the textbook hedging scenario. You placed your bet months ago at a long price. The team or player you backed has performed well and the market has dramatically shortened their odds. Your original position is now deeply in-the-money and hedging lets you crystallise that value before the event.

2. Live In-Play Hedging

During a game, the live market moves continuously. If you backed a team pre-game and they are now comfortably ahead with 10 minutes remaining, their live odds will have shortened significantly. Hedging your position in-play locks in profit before the game ends. This is particularly popular in NRL, AFL and soccer where late-game momentum can shift quickly.

3. Final Leg of a Multi

A multi (parlay) that has come down to the last leg is another prime hedging situation. Suppose you have built a $10 four-leg multi up to the final selection and your potential payout is $800. If the final leg is a near even-money match, you can hedge the opposing side at a bookmaker or on Betfair Exchange to guarantee a profit regardless of how the final leg settles.

In each of these cases, the hedge works because your original stake is already placed and the only question is how to optimise the return from your current position. DegenToPro tracks all your open bets so you can instantly see which positions are in-the-money and ready to hedge.

The Hedge Stake Formula

The core question when hedging is: how much do I stake on the opposing outcome to guarantee equal profit on both sides? The formula for a level-profit hedge stake is:

This formula gives the stake that makes your return equal on both sides. It is not always optimal to lock in perfectly equal profit - sometimes you will want to skew the hedge to reduce risk rather than fully equalise - but it is the standard starting point.

You can also calculate the guaranteed profit from a level hedge:

When the hedge stake is calculated using the formula above, both net profit figures will be identical - that is the point of a level hedge. DegenToPro can calculate your optimal hedge stake automatically based on your tracked open positions.

Worked Example: Hedging an AFL Premiership Bet

Let us walk through a complete real-world scenario step by step.

The original bet: In March you backed the Brisbane Lions to win the AFL Premiership at 15.00 with Sportsbet. You staked $100. Your potential return is $1,500 ($1,400 profit).

The situation now: Brisbane has made the grand final. Betfair Exchange is offering Brisbane to win at 1.80 (meaning the opposition is around 2.20). You want to hedge the position to lock in a guaranteed profit before the game.

By staking $681.82 on the opposition at 2.20, you have locked in a guaranteed $718.18 profit regardless of the grand final result. You originally risked $100 for a shot at $1,400 profit. The hedge converts that speculative position into a locked $718.18 - a return of over 700% on your original stake, guaranteed.

Note that the hedge odds matter enormously. If you can only get 2.00 on the opposition rather than 2.20, the calculation changes:

This is why getting the best available hedge odds is critical. Even a small difference in hedge odds has a significant impact on your locked profit. Using an exchange like Betfair - where you can often find better prices than retail bookmakers - materially improves your hedge outcome.

Hedging vs Arbitrage vs Cash-Out

These three strategies are related but distinct. Understanding the difference helps you choose the right tool for each situation.

Hedging requires that the market has moved in your favour since you placed your original bet. You are extracting value from a position that has appreciated.

Arbitrage is a form of simultaneous hedging where you place both sides of a market at the same time across different bookmakers, exploiting a price gap that guarantees profit from the first moment. It does not require your position to appreciate - the gap exists at the time of placement. See our full arbitrage guide for Australians.

Cash-out is a hedging proxy offered directly by bookmakers like Sportsbet and TAB. The bookmaker calculates a cash settlement based on current odds and offers to settle your bet early. The convenience is real, but the bookmaker builds a margin into the cash-out price - you almost always receive less than you would by hedging manually on an exchange. Cash-out is the most expensive way to hedge.

The EV Cost of Hedging

Here is the honest truth that most hedging guides skip: hedging a +EV bet reduces your expected value. If your original bet had positive expected value, placing a hedge bet on the opposing outcome at a price with no edge - or negative edge - reduces the overall EV of your combined position.

This does not mean hedging is wrong. It means hedging is a deliberate trade-off between EV and variance reduction. You are sacrificing some expected profit in exchange for certainty. Whether that trade-off is worth it depends on your situation:

The disciplined approach is to quantify the EV cost before hedging. Calculate what your expected profit is from letting the original bet ride versus the guaranteed amount from hedging. If the guaranteed amount is substantially lower than your EV, you are paying a high premium for certainty. If the hedge is cheap - because you can get excellent odds on the exchange - the EV cost is minimal and locking in profit can be the rational choice.

Professional punters tracked on DegenToPro log both their original stake EV and their hedge decisions, giving them a full audit trail of how hedging behaviour affects long-term results.

Using Betfair Exchange to Hedge

The best place to place your hedge bet is almost always Betfair Exchange rather than a retail bookmaker. There are two reasons for this:

Better Odds

Betfair Exchange prices are set by the market - other punters taking the opposing side - rather than by a bookmaker adding a margin. For popular events like AFL grand finals, NRL finals and major racing, Betfair Exchange prices are typically the sharpest available. A better hedge price means more guaranteed profit from your locked position, as the table in the worked example above demonstrates clearly.

Laying Rather Than Backing

On Betfair Exchange you can also lay your original selection rather than backing the opposition. Laying means acting as the bookmaker - you accept someone else's bet that your original selection will win. If your original bet wins, the lay loses (but your original bet pays out more); if your original selection loses, the lay wins and pays you.

Laying is mathematically equivalent to backing the opposition in a two-outcome market, but in markets with multiple outcomes (such as horse racing or an outright tournament), laying your selection is often cleaner than trying to back every other outcome individually.

For a detailed walkthrough of how Betfair's lay betting mechanics work, see our Lay Betting Betfair Guide.

Betfair Commissions

Betfair charges a commission on winning bets (typically 5% for Australian customers, though this varies based on your Premium Charge status and market). Factor this into your hedge calculation. When calculating your hedge stake on Betfair, adjust your effective hedge odds downward to account for commission:

Effective hedge odds = (Betfair odds − 1) × (1 − commission rate) + 1

For example, if Betfair shows 2.20 and you pay 5% commission: effective odds = (2.20 − 1) × 0.95 + 1 = 1.14 + 1 = 2.14. Use 2.14 in your hedge stake calculation, not 2.20.

How DegenToPro Helps You Hedge Intelligently

Hedging works best when you have full visibility over your open positions and access to the best available prices in real time. That is exactly what DegenToPro is built to provide for Australian punters.

The biggest mistake punters make when hedging is acting too slowly. A futures position comes alive and by the time they calculate the hedge stake, find the best price and place the bet, the odds have moved. DegenToPro consolidates all of that - open positions, live odds, hedge calculations - into one platform, so you can act on hedge opportunities in seconds rather than minutes.

Across 100+ bookmakers, DegenToPro's Pro Odds Screener shows you the full picture of where the best hedge prices are available right now. Combined with the bet tracker that already has your original stake and odds logged, the platform does the heavy lifting so you can focus on making the right decision - not scrambling to gather the data.

DegenToPro starts free with no card required. The free tier gives you access to the bet tracker and basic odds comparison. Paid plans (from $59.99/week, $199.99/month or $699.99 lifetime AUD) unlock the full Pro Odds Screener, arbitrage finder, +EV finder and verified CLV tracking. Right now, all plans are 20% off under the World Cup Offer.

Frequently Asked Questions

Is hedging bets legal in Australia?

Yes. Hedging bets is completely legal in Australia. Placing a second bet on an opposing outcome - whether at a retail bookmaker or on Betfair Exchange - is a standard betting strategy used by recreational and professional punters. There are no laws preventing it.

Does hedging always guarantee a profit?

Only if your original position has appreciated sufficiently. If you backed a team at 15.00 and they are now available at 1.50, you have a strong hedge opportunity. If they are now available at 10.00 (the market does not rate them much higher than before), the combined returns from both sides may not cover both stakes - you might be reducing risk rather than locking in profit. Always run the numbers before placing a hedge.

Should I hedge the final leg of every multi?

Not automatically. Hedging the final leg makes most sense when the guaranteed profit from the hedge significantly exceeds your normal unit size, and when the hedge odds available give you a reasonable locked return. For small multis where the final-leg payout is only slightly above your original stake, the EV cost of hedging may outweigh the benefit. Run the hedge stake calculation first.

Is it better to hedge on a bookmaker or Betfair Exchange?

Betfair Exchange almost always offers better prices for hedging in popular markets - AFL, NRL, soccer and major racing. The exchange is peer-to-peer and the margin is lower than any retail bookmaker. Better hedge odds means more guaranteed profit. Remember to factor in Betfair's commission when comparing prices.

How is hedging different from cashing out?

Cash-out is a bookmaker-controlled feature that settles your bet at a price the bookmaker sets, which always includes their margin. Hedging manually - by placing a second bet at the best available odds - typically returns more guaranteed profit than the bookmaker's cash-out offer for the same position. Cash-out is convenient; manual hedging is more profitable.

What is partial hedging?

A partial hedge is when you place a smaller hedge bet than the full level-profit stake. Rather than locking in equal profit on both sides, you reduce your exposure on the losing outcome while retaining a higher upside if your original bet wins. It is a middle ground between no hedge and a full hedge - useful when you still have some conviction in your original selection but want to reduce downside risk.

Can I use DegenToPro to find hedge opportunities automatically?

Yes. DegenToPro's arbitrage finder identifies situations where prices across multiple books have diverged enough to create guaranteed profit - which is mechanically identical to a hedging opportunity. The bet tracker flags your open positions and their current market value, so you can see at a glance which bets are in-the-money and ready to hedge. Try it free.

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