Hedging, as in ‘hedging one's bet', is to take out a secondary (or more) position(s) with the aim of reducing the chances of a loss, or limiting liability.
The practice of laying off all or part of a bet by making a bet in the opposite direction. For example, you lay a bet of £20 at 4/1 (5.0 using Betfair decimal odds) on Tiger Woods to win the US Masters before the tournament begins. Your liability is £90 if Woods wins. At the start of the final round, he's 7 shots behind the leader and his odds have drifted to 40/1. You look set fair to win £20 but are wary of a late Woods rally. By having a £3 bet on Woods you effectively guarantee yourself a profit regardless of whether Woods wins or loses:- Result Winning bet Losing bet Net Profit Woods loses£20£17 Woods wins£3 x 40/1 = £120£20 @ 4/1 = £80£40
Placing a bet opposite to the original bet so as to reduce the action a bettor has on a sports event