What hedging a bet means
Hedging is placing a second bet against your first so that the result no longer depends on the race. The usual case: you backed a horse at a big price, its odds have shortened, and you lay it at a betting exchange at the new, lower price. Because you backed high and laid low, you can lock in a profit on both outcomes. It works the other way too: if the price has drifted, a hedge locks in a smaller loss.
The calculator covers three situations:
- Backed at a bookmaker, lay it off on an exchange: the classic hedge of an ante-post or early-price bet.
- Backed on an exchange, lay on the same exchange: a trade on one market, where commission is charged only on the net win.
- Laid on an exchange, back it to trade out: you laid first and the price has drifted.
How to calculate a hedge
For a bet backed at a bookmaker and laid at an exchange, the lay stake that gives the same result on both outcomes is:
Lay stake = back stake × back odds ÷ (lay odds − commission)
with odds in decimal and commission as a decimal (2% = 0.02). It is the same formula matched bettors use for a qualifying bet; our matched betting calculator uses it too.
Example: £10 backed at 10/1 (11.0), now 4.0 to lay, 2% commission. Lay stake = £10 × 11 ÷ 3.98 = £27.64, with a liability of £27.64 × 3 = £82.91.
- Horse wins: £100 from the bookmaker, minus the £82.91 liability = £17.09.
- Horse loses: £27.64 lay stake less 2% commission = £27.09, minus the £10 back stake = £17.09.
When both bets are on the same exchange, the lay stake is simply back stake × back odds ÷ lay odds, and commission comes off the net profit whichever side wins: the same £10 at 11.0 laid at 4.0 needs a £27.50 lay and leaves £17.15 after 2%.
Hedging vs cash out
A bookmaker's cash out offer is a hedge done for you, priced by the bookmaker. A margin-free cash out of a back bet at the current price would be back stake × back odds ÷ current odds: for the £10 at 11.0 now at 4.0, that is £27.50, a £17.50 profit. The calculator shows that figure as the fair cash out value. When an offer comes in below the fair value, the difference is what the bookmaker keeps for taking the bet off your hands. Comparing the two tells you what that convenience is costing before you press the button.
Partial hedges
You don't have to lock in the same result on both outcomes. Slide How much to hedge below 100% to lay only part of the bet. At 50% in the example, the lay stake is £13.82: you keep £58.54 if the horse wins and £3.54 if it loses. A partial hedge keeps more of the upside and still covers your stake. Whether that is worth it is your call; the calculator just shows both outcomes before you decide.
Trading out of a lay
If you laid a horse and its price has drifted, back it at the new price to lock in the difference. The back stake is lay stake × lay odds ÷ back odds. A £20 lay at 3.0 that has drifted to 5.0 needs a £12 back bet: £8 before commission whichever way the race goes, £7.84 after 2%. If the price has shortened instead, the same sum locks in a loss, which is the cost of closing the position. See our lay bet calculator for liability on the original lay and what is lay betting for the basics.
Hedging without an exchange
With bookmakers only, you hedge by backing the other runners. That is dutching: splitting a stake across several selections so each returns the same. Our dutching calculator does it. Bookmaker prices carry a bigger margin than exchange prices, so a bookmaker-only hedge locks in less. Remember that a hedge never adds value: it swaps the chance of a bigger win for certainty, and each extra bet pays some margin or commission.