Hedging, Dutching and Arbing
In betting, there are a number of ways in which you can play the odds and hopefully set yourself up for a certain profit. Of course, there are no guarantees but if you follow these processes and are quick enough to keep up with the changing odds, you could enjoy some regular returns.
These three distinct methods have their own terminology but what does it all mean?
If you are familiar with the concept of backing and laying then it will be easy to understand what hedging is all about. Let’s take horse racing as an example: if you back a horse then you expect it to win but if you lay it then you are effectively betting on it to lose.
Hedging requires a back and a lay on the same horse in the same race but one stake is made ante post and the other is placed while the event is in play. The objective is to take advantage of the fluctuating odds to ensure a profit at the end of the race itself.
Here’s what could happen.
Horse is priced at 1.7 pre-race and you stake £10.00 which will return £17.00 if the horse wins
The race starts, the horse is available to lay at 2.5. Stake £6.50 and you collect £17.20 if it loses.
Ok so that results in a very small return but you can see how a higher profit can be made with a bigger stake, or a different set of odds. The issue could be that a suitable lay price doesn’t become available but hedging is viable and many traders use it to make regular profits.
Dutching is a far more complicated way of making a profit as it requires multiple bets and a very keen eye for mathematics! Also, this is far less certain in terms of guaranteeing a return although it does increase your chances of landing a winner.
Once again, horse racing is a good example here so let’s say you’ve picked three runners from the field. All three are priced at very different odds – one could be the favourite while the other is a rank outsider. The task of the dutcher is to take those prices and stake in such a way that a profit is assured, as long as one of them comes home first.
If none of the three win then you’ve lost your stake which is an obvious downside but one of the advantages of Dutching is that you can place bets ante post and you don’t have to react quickly to any in-play fluctuation.
Arbing – or Abitrage Betting involves staking on an event where there are only two possible outcomes so tennis gives us a great example. In this sport, there can only ever be a win for either player as the tie does not apply.
Similarly to the previous types of bets, you need to find a set of odds that allows you to stake so that you are certain of a profit. For example,
Player A is on offer at 1.7
Player B is on offer at 2.5
You then place say £100 on player A to win £170.00 and £65.00 on B to potentially earn £171.20. Either way, you win money!
A word of warning with arbing: This involves finding two separate bookies, some of whom are sensitive to the process. Sometimes, you need to stake an odd amount like £10.17 and this may alert them leading to account closure so if you can round up or down, things will be easier.
As we said at the start of the article, there is no such thing as a guaranteed profit and the important point to bear in mind is the changing market which could spoil your calculations. However, if you can think like a trader and have a sharp analytical mind then any of these methods could increase your returns.