Greening up (hedging) means placing an opposite bet at the current price so the result is the same whichever horse wins. If you backed and the price has shortened, you lay back at the lower price; if you laid and the price has drifted, you back at the higher price.
The formula
Green result = closing stake − opening stake (backed first)
Green result = opening stake − closing stake (laid first)
Worked example
If it wins: +£40.00 − £37.50 = +£2.50. If it loses: −£10.00 + £12.50 = +£2.50.
After 5% commission on the net win: +£2.38 on every outcome.
When the price goes against you
The same maths works in reverse. If you backed at 5.0 and the horse drifts to 6.0, the lay stake is £8.33 and every outcome loses £1.67. Closing out fixes that loss instead of leaving the full £10 at risk; traders call this a red book. Deciding in advance where you will close a losing trade matters more than any calculator.
Things the maths doesn't cover
- Partial matching. If only part of your closing order matches, you are left with an unbalanced position.
- The off. Unmatched pre-race orders can be cancelled or carried in-play depending on your settings, so check what happens to them at the off.
- Commission applies to your net profit on the market, so it reduces a green but never deepens a red.
Questions
Why is it called greening up?
Exchange software shows profit in green and loss in red. A fully hedged winning trade shows green on every runner.
Is greening up the same as cashing out?
It achieves the same thing. The exchange's own cash-out button uses this maths, but calculating it yourself lets you choose the price and see the stake before you commit.