Hedging on Betfair is the cherry on top of the ability to trade price movements.

Hedging allows traders to lock in an equal profit regardless of whether the horse or team that they were trading on wins or not, allowing you to completely remove the outcome of the race or match from the equation.

For instance, in the example in Trading on Betfair, the trader Lays £100 @ 4.1 and Backs £100 @ 4.6, giving him a profit of £50 if the horse wins and no loss if the horse wins. That's great if the horse wins, but if it loses then you still haven't made any money, despite having made a profitable trade.

Hedging your £50 profit will make sure that you make the same profit whether the horse wins or loses. You can do this pressing the Hedge button on BetTrader which will divide your profit by the available to Lay price and will then Lay the result of that calculation to give you an equal profit whichever horse wins the race:

Press Hedge Button > £50 / 4.6 = Lay £10.86 on same horse

If Horse wins:
You make £50 (from Laying 4.1 and Backing 4.6)
You lose £39.13 (from Laying £10.86 @ 4.6)
Result = £50 - £39.13 = +£10.87 profit

If Horse loses:
You make £10.86 (from Laying £10.86)
Result = +£10.86 profit

By Hedging your £50 potential profit which you will make only if the horse wins, you can ensure a smaller, but guaranteed, profit whether the horse wins or loses.