system
A chat on subreddit /r/wallstreetbets
human
&gt;But all he really needs to do is properly hedge the downside risk

How is this different to just betting less?

Unless you assume the betting agency is giving you odds that add up to 100%+ when you play both (all) sides, which they won't. 

If you want to minimize your losses by 90% should you lose, you do that best by lowering your bet by 90%. Not by betting the opposite end result.

Where hedging comes in is you've bet on an unlikely outcome (say, an underdog team winning a championship), and you only put in a small amount but your team is in the final and you are looking at winning a huge sum of money.

Now, instead of going all-or-nothing in the final, you can guarantee winning at least SOME money by betting against your original team. Then no matter which team wins, you are going to profit. Because your original bet had increased in value so much.

EDIT: simple example, before the season I bet $10 on the worst team in the NHL to win the Stanley Cup, as a laugh. I get 250:1 odds. Which means I likely just wasted $10. But should that sucky team win, I would get $2500. 

Now, the season goes along and that underdog team plays decent and gets to the playoffs and somehow makes it to the final, where they are again big underdogs. Their opponents are only given odds of 150:100, so betting against my original team would net me $1.50 for every dollar I bet. I am looking at losing $10 or winning $2500, with the former being the likely outcome. I then decide to bet against my original team for $1000. I secure winning at least some money. 

If my original team wins, I get:  
$2500 (original winnings) - $1000 (new bet losses) - $10 (original bet) = $1,490

If my original team loses, I get:  
1.5x$1000 (new bet winnings) - $10 (original bet) = $1,490

I can't lose no matter what happens in the final.
gpt
Wow, sounds legit. But only if the underdog makes it to the final, if not you just lost 10 DLLs right? Sounds smart. I'm not smart