How to hedge a bet, and why selling a position does the same job

To hedge a bet is to place a second bet on the other side, so you win something, or lose less, whichever way it ends. The usual formula for an equal hedge is: hedge stake = what your first bet would return ÷ the decimal odds on the other side. If a $20 bet on Player A at 3.00 would return $60 and Player B is now 3.30, a hedge of $60 ÷ 3.30 = $18.18 on B returns $60 either way, locking in about $21.82. On a prediction market you don't need the formula: selling your shares at the current price does the same job.

A hedge doesn't make money appear. It swaps an uncertain result for a smaller, more certain one, and the margin or fee you pay to do it is a real cost. This page shows the numbers so you can decide when that's worth it.

The hedge formula

For a bet with a bookmaker, the equal hedge works like this:

1. Work out what your first bet returns if it wins: stake × decimal odds.
2. Divide that by the decimal odds now on offer for the other side. That's your hedge stake.
3. Whichever player wins, one of the two bets returns the same amount. Your locked-in result is that amount minus both stakes.

If the other side's odds are in American or fractional form, convert them to decimal first with the odds converter. And remember that a bookmaker's odds include a margin, so the hedge is always priced a little against you; the no-vig calculator shows how big that margin is.

On a prediction market, hedging is selling

On Polymarket or Kalshi a winning share pays $1, and you can sell before the end at the current price. That gives you two ways to hedge, and they come to the same thing:

• Sell your shares. You take the current price in cash and the match no longer affects you.
• Buy the other player's shares. Because the two prices add up to about $1, holding equal numbers of both is worth about $1 a pair whatever happens.

Here's the same match as above on a market. You bought 100 shares of A at 40¢ for $40.00, and after the first set A is 70¢ and B is 30¢:

The results are before fees; the last column is the taker fee for that trade under Polymarket's sports fee of shares × 5% × price × (1 minus price), as set out in Polymarket fees explained. Selling and buying the other side lock in the same $30.00 here. In practice the spread between buying and selling prices makes one slightly better than the other at any moment, so check both before you trade. The profit calculator works out any of these rows for your own numbers.

A hedge has to survive the rules

A hedge only works if both sides settle the way you expect. On a single Polymarket tennis market this is safe even in odd cases. If the match has no winner within 14 days of the scheduled start, or ends in a walkover, the market resolves 50-50 and every share pays 50¢. If you sold, you already have cash. If you bought 100 of each player, 200 shares at 50¢ still pay $100, the same as before.

Hedging across two platforms is different. Polymarket and Kalshi settle walkovers and postponed matches differently, so a hedge split between them can come apart in exactly the cases you didn't plan for. Kalshi vs Polymarket for tennis lists the rule differences, and what happens if a player retires covers retirements.

Cash-out offers

Some bookmakers offer to cash out a bet before the end. A cash-out is an offer to buy your bet back at a price the bookmaker sets. It's a hedge done for you, and because the bookmaker sets the price, it can include their margin. You can compare it with the hedge you could place yourself using the formula above: whichever locks in more is the better deal at that moment. On a prediction market there's no separate cash-out, because selling at the market price is the same thing.

When a hedge makes sense, and when it doesn't

• It makes sense when you'd rather have a certain smaller result than an uncertain bigger one: the position has grown to a size you're not comfortable losing, or you no longer believe the price is wrong.
• It doesn't just because a position is in profit. If you still think the price is too low, hedging gives away the part you were right about, and pays a margin or fee to do it.
• It costs something every time. A bookmaker margin, a market fee, or the spread. Hedging often is a steady cost.

The cleanest way to hedge is to decide in advance: set the price at which you'd sell for a profit and the price at which you'd cut a loss before you buy. Take-profit and stop-loss for tennis trading shows how, and the 77 Tennis demo lets you practise it on live prices with play money.

Sources

The formulas and examples on this page are arithmetic. Polymarket's taker fee and its tennis settlement rules are from Polymarket's fee page and live market rules, checked on 31 October 2026, as set out in Polymarket fees explained and Polymarket odds explained.

FAQ

How do you calculate a hedge bet?

Divide what your first bet would return by the decimal odds now on the other side. That's the stake that returns the same amount whichever side wins. For example, a $60 return hedged at 3.30 needs $18.18.

Is hedging a bet worth it?

Only if you'd rather lock in a smaller result than keep the risk. A hedge always costs something: the bookmaker's margin, a market fee, or the spread. It doesn't add value on its own.

What is a partial hedge?

A smaller second bet that cuts the loss if things go wrong while keeping most of the upside. In the example on this page, hedging half turns a +$40 or -$20 bet into +$30.91 or +$0.91.

How do you hedge on Polymarket?

Sell your shares at the current price, or buy the same number of shares in the other player. Both lock in roughly the same result, less the trading fee and spread.

Is cash out the same as hedging?

It does the same job: the bookmaker buys your bet back at a price they set, which can include their margin. Compare it with the hedge you could place yourself.