In sports betting the possible result of a bet is either win or loss. And in no bet, you will be refunded. The major out come is that you both win your bet and get the money or if your team fails to win, then you will lose your bet. It is like 50/50 chance. Now there are a lot of people who will be in double mind and never take a chance to lose a bet. So here the term hedging comes. According to the financial definition it is the investment that is performed to minimize the loss. And in the sports betting, hedging is done to make sure that you will get the profit no matter which team won.

In the sports betting, hedging is performed by betting on the opposite side. That means you first on a team say A. Team A may be favorite or underdog. But there is no guarantee that it will win the match. So to avoid the bet loss or money you put some money to bet on the team B also. And this is performed in a way that, you can gain a net profit from calculating the win and loss bet. For example, think about a soccer game between team A and B. Now according to the record or the league table, team A is the favorite. And their odd is 4.0. So you bet $20 on the team A. So if team A wins you will win $60 but if they lose you will lose $20.

On the other hand the team B is the underdog and their odd is 2.0. But there is no guarantee that team B will lose. So to avoid the loss you place another bet on team B, which is $20. As a result you can be sure that if team A loses, still you will not actually losing any money. It is because if team A loses you will lose $20 but as you have bet $20 on the team B, it will give you $20 profit. So, at the end you have totally invest $40 on the both side and also earn $40 even your first bet on team A lose. This is an example how you can ensure that you are not losing any money. But this hedging is also give you profit. For example, take the previous game. Here, if you bet $20 on team A and $30 on team B then even the team A loses you will get net $10 profit. It is because in this case you have invest (20+30) or $50. But win total $60. Thus you can ensure that you can make profit even you lose the first bet.