Term
Hedging
Placing offsetting bets to lock in profit or limit loss before settlement.
Definition
Hedging is the practice of placing one or more counter-bets against an existing position so that the bettor's payout is fixed (or bounded) before settlement. It sacrifices some EV to reduce variance and is often used near the end of a parlay run, before a live underdog cashes, or when bankroll-management rules require locking in.
Example
You hold a +500 future on Team A worth $1,000 if it wins. Before the final, you stake $250 on the opposing team at +200 to lock a guaranteed return of approximately $500 either way — sacrificing $500 of upside for zero variance.
Why it matters
Hedging interacts with the Bettor Score in two ways: it reduces variance (positive) but also typically reduces CLV and EV (mixed). Used sparingly to manage drawdown risk, it is a legitimate evaluation strategy.
Related terms
Variance
The dispersion of bet outcomes around their expected value — high variance means results swing wildly even when long-run +EV holds.
Drawdown
The percentage decline from a bankroll’s highest value to its current value — measured per phase and per day in the Crypto Bet Capital ruleset.
Expected ValueEV
A probability-weighted average return — the long-run profit or loss per unit staked if the same bet were placed indefinitely.
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