How the bonus bet conversion calculator works
A free bet returns only the winnings, not the stake, so it is worth less than cash. This calculator finds the hedge stake on the opposite outcome that locks in the same cash return whichever way the event goes, and reports that return as a percentage of the free bet's face value.
- Profit if the free bet wins: free bet amount multiplied by the decimal odds minus one.
- Hedge stake: that profit divided by the hedge decimal odds, so the hedge returns the same amount if the free bet loses.
- Locked return: free-bet profit minus the hedge stake. Divide by the free bet amount for the conversion rate.
Worked example
A £50 free bet placed at 4.00, hedged at 1.40.
- Profit if the free bet wins: £150.
- Hedge stake: £150 ÷ 1.40 = £107.14 on the other side.
- Either way you keep about £42.86, an 86% conversion of the free bet's face value.
Longer odds on the free bet and shorter odds on the hedge raise the conversion rate; the hedge must be real cash you are willing to tie up.
Questions
- Why place a free bet at long odds?
- Because the stake is not returned, the free bet loses the least value where the winnings dominate the return, which is at long prices. The hedge then removes the variance.
- What conversion rate is good?
- Around 70% is typical on a two-way market; 80% and above needs a long free-bet price and a tight hedge. Anything close to 100% means the two prices together were close to arbitrage.
- Does this work with stake-returned free bets?
- If the stake is returned the bet behaves like cash and the hedge stake is different. This calculator assumes stake not returned, which is the usual promotional form.
