Hedging Calculator

How hedging works

Because exactly one side of a market settles at $1, holding equal contracts on both sides guarantees the same payout whatever happens. To fully hedge a position, you buy the same number of contracts on the opposite side at its current price. Your guaranteed profit is then your total payout minus everything you paid: for 100 contracts bought at 40¢ and hedged at 35¢, you have paid 75¢ per pair to receive $1 — a locked 25¢, or $25.

When to hedge

Hedging is most useful when a position has moved in your favour and you want to lock in a profit rather than risk the outcome — the same logic as selling before resolution, just executed by buying the other side. The trade-off is that a full hedge caps your upside: you give up the chance of the larger win in exchange for certainty. A partial hedge (buying fewer opposite contracts) keeps some upside while reducing risk. For the mechanics of locking guaranteed outcomes, see the arbitrage calculator, and for the wider approach, bankroll management.

More calculators

Pair this tool with the others in the kit:

Frequently asked questions

What does hedging a bet mean?

Hedging means taking a position on the opposite side of a market to reduce risk or lock in a result. Because exactly one side settles at $1, holding equal contracts on both sides guarantees the same payout whatever happens.

How do I fully hedge a position?

Buy the same number of contracts on the opposite side at its current price. Your guaranteed profit is then your total payout minus everything you paid across both sides — a locked outcome regardless of how the market resolves.

Does hedging guarantee a profit?

A full hedge locks in a fixed result, which is a profit only if the combined price you paid across both sides is under $1. It also caps your upside, since you give up the larger potential win in exchange for certainty.