Gamblers Corner - Correct Hedge for Final Four? (1 Viewer)

[Cyclones]

Hero has pocket Queens and $200 in front of him at the beginning of a hand of 5/10 NLHE. He is in the dealer position with a table full of callers. He makes it $190 and everybody but the cutoff folds who puts hero in for his last $10 with AK unsuited.

Should hero

A) fold to the $10 "raise"

B) call and run it twice/three/four/five/x times

C) snap call and live with the results

Cliffs: You guys who argue that the decision to hedge was smart are picking A

you wasted a lot of time typing a completely unrelated scenario.

I think the only way this scenario works for this particular case is thus;

Hero has pocket Queens and $200 in front of him at the beginning of a hand of 5/10 NLHE. He is in the dealer position with a table full of callers. He makes it $190 and everybody but the cutoff folds. Cutoff raises to $8,000 and tells hero if he puts his last $10 in he can go ahead and play for the pot. Cutoff turns over AK, sees the QQ and says we can run this out, or we can chop now, then let the dealer run it, and if we tie the hand I'll throw another $3600 your way.

 

[Cliff Clavin]

A whole lot of dumb arguing going on in here for something pretty simple.

Its a one off bet and the guy wanted to hedge. He either wants to lock in some winnings or he doesn't. Whether it is +EV or not is irrelevant.

This is very true.

But in this case his hedge made sense. If Uconn was -3 and he bet them at -3, I would have been as strongly against that as possible. Would REALLY suck to go into this final game with the bets he had and LOSE 4 grand or more total.

If the Uconn moneyline was like -140 or so, I would only have advised a hedge of about $1,000 so at least he wouldnt lose money through this whole ordeal.

Well of course he would have to bet properly. Having the possibility of losing both bets isn't hedging.

 

[ghostguy123]

If Kentucky truly was a favorite and their moneyline was as iron clad as an "odds" bet on craps, then of course if he was able to run the scenario 10000 times he would let it ride.............................................two problems though. One, he got one shot at it. Two, that moneyline doesn't represent actual probability.

And 3... this is still the Kentucky team that lost 10 games this year due to being young and inconsistent.

Indeed. And as I stated before, I thought this should have at least been a pickem game, if not Uconn a slight favorite, maybe a point.

Oh, and this sucked, but I used my buddies bookie last night and the ####er doesnt do parlays (or moneylines, just spreads). He also puts out his own spreads, though they are always within a point of the general vegas lines. Wanted Uconn and the under. Son of a gun cost me money.

 

[ghostguy123]

A whole lot of dumb arguing going on in here for something pretty simple.

Its a one off bet and the guy wanted to hedge. He either wants to lock in some winnings or he doesn't. Whether it is +EV or not is irrelevant.

This is very true.

But in this case his hedge made sense. If Uconn was -3 and he bet them at -3, I would have been as strongly against that as possible. Would REALLY suck to go into this final game with the bets he had and LOSE 4 grand or more total.

If the Uconn moneyline was like -140 or so, I would only have advised a hedge of about $1,000 so at least he wouldnt lose money through this whole ordeal.

Well of course he would have to bet properly. Having the possibility of losing both bets isn't hedging.

Indeed. The biggest factor here is BETTING PROPERLY. He did "gamble" a bit by taking the points and not the moneyline when it was +135, but I was cool with that for the pure rooting interest of it.

But when you got Kentucky at 40-1 in a game that really is a tossup, and the team they are playing is a pickem or an underdog......................it's impossible to say hedging is "wrong" in any capacity, with any amount of equations.

 

[Cliff Clavin]

A whole lot of dumb arguing going on in here for something pretty simple.

Its a one off bet and the guy wanted to hedge. He either wants to lock in some winnings or he doesn't. Whether it is +EV or not is irrelevant.

This is very true.

But in this case his hedge made sense. If Uconn was -3 and he bet them at -3, I would have been as strongly against that as possible. Would REALLY suck to go into this final game with the bets he had and LOSE 4 grand or more total.

If the Uconn moneyline was like -140 or so, I would only have advised a hedge of about $1,000 so at least he wouldnt lose money through this whole ordeal.

Well of course he would have to bet properly. Having the possibility of losing both bets isn't hedging.

Indeed. The biggest factor here is BETTING PROPERLY. He did "gamble" a bit by taking the points and not the moneyline when it was +135, but I was cool with that for the pure rooting interest of it.

But when you got Kentucky at 40-1 in a game that really is a tossup, and the team they are playing is a pickem or an underdog......................it's impossible to say hedging is "wrong" in any capacity, with any amount of equations.

That is the only place where the math would be relevant. Was he better taking +3 and have the shot at a winning both or taking the +money.

 

[ghostguy123]

A whole lot of dumb arguing going on in here for something pretty simple.

Its a one off bet and the guy wanted to hedge. He either wants to lock in some winnings or he doesn't. Whether it is +EV or not is irrelevant impossible to calculate with mathematical certainty.

In this case, it was not possible.

Prove to me what percentage chance Kentucky had to win the game. If you can prove that, you win this argument.

 

[ghostguy123]

That is the only place where the math would be relevant. Was he better taking +3 and have the shot at a winning both or taking the +money.

Right, but even that you can't prove with absolute certainty, because you can't prove the exact percentage chance that Kentucky wins by 1, 2 or 3.

The BEST bet was likely the Uconn moneyline for like $3,500 to win roughly $4,500. But that isn't iron clad.

 

[ghostguy123]

That is the only place where the math would be relevant. Was he better taking +3 and have the shot at a winning both or taking the +money.

Right, but even that you can't prove with absolute certainty, because you can't prove the exact percentage chance that Kentucky wins by 1, 2 or 3.

The BEST bet was likely the Uconn moneyline for like $3,500 to win roughly $4,500. But that isn't iron clad.

i think I responded to wrong person.....................on the post above this one, lol

you get the idea. blah blah blah, silly me.

anyway.............

 

[Cyclones]

That is the only place where the math would be relevant. Was he better taking +3 and have the shot at a winning both or taking the +money.

Right, but even that you can't prove with absolute certainty, because you can't prove the exact percentage chance that Kentucky wins by 1, 2 or 3.

The BEST bet was likely the Uconn moneyline for like $3,500 to win roughly $4,500. But that isn't iron clad.

But I don't think any of the self anointed "sharps" in this thread are even arguing that I made the incorrect hedge, they are saying I shouldn't have hedged period. If I knew with certainty that every day for a year I would wake up in the morning, deposit $200 into something and subsequently have a ~60% chance of winning $8000 or a 100% chance at $4000, I'd have more money at the end of the year if I went for the $8000 every day.

There are two problems with this - 1) I don't believe UK really had a ~60% to win this game. 2) This was a one shot deal. It's highly likely that I will never be holding a 40-1 ticket in my hands for a team in the national title game again for the rest of my life.

 

[Jalapanose]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

 

[Cyclones]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

False.

EV equations play into long term scenarios with multiple opportunities. This was a one off situation.

 

[QuizGuy66]

Why is hero so short stacked in a 5/10NL game?

Assessment of skill level of opponent vs hero?

Read on playing style of opponent?

It's NEVER purely a black and white issue. That's 1st level thinking.

And at how horrible this analogy is.. hopefully your grasp on sports betting is better than your grasp on poker.

Because he can't possibly afford to lose any more money, which is why he MUST MUST MUST fold to protect the last $10 he has in the world!

This thread suddenly reminds me of another thread around here. Perhaps the $200 figure was by design - is the last $10 needed for books?

-QG

 

[QuizGuy66]

The poker analogy is awful.

A more comparable analogy would be insuring a black-jack against an ace w/o counting or at an auto-shuffle table.

The odds the dealer has blackjack are roughly 4/13. The payout is 2-1. I never insure in this scenario.

However, cy was not playing blackjack - it was one-off situation with more variance. Hedges are used against uncertainty.

-QG

 

[gianmarco]

I'll try once more to explain why EV has very little relevance in the scenario.

Let's assume the following. Which of these would you hedge?

1) You've put in $1. You have a chance to win $10 if KY wins and $0 if they lose. You can spend an additional $2 to guarantee winning $5.

2) You've put in $10. You have a chance to win $100 if KY wins and $0 if they lose. You can spend an additional $20 to guarantee winning $50.

3) You've put in $100. You have a chance to win $1,000 if KY wins and $0 if they lose. You can spend an additional $200 to guarantee winning $500.

4) You've put in $1000. You have a chance to win $10,000 if KY wins and $0 if they lose. You can spend an additional $2000 to guarantee winning $5000.

5) You've put in $10000. You have a chance to win $100,000 if KY wins and $0 if they lose. You can spend an additional $20,000 to guarantee winning $50000.

6) You've put in $100000. You have a chance to win $1,000,000 if KY wins and $0 if they lose. You can spend an additional $200,000 to guarantee winning $500,000.

Exact same EV for every one of those scenarios. The only difference is the amount of money involved. When we're talking $10, not a big deal, no one is hedging there. When you get to scenario #6, most everyone is hedging. Even though EV tells you not to. Why? Because the amount of money matters more than EV. And this is going to be different for every person. You ask a homeless person on the street and he might be hedging #2 if he could. You ask Donald Trump and he may not hedge any one of those. It all depends on the person.

But, there is no right or wrong answer on whether or not you should hedge. It can be -EV and still ok to hedge if that's what you feel comfortable with. The only "wrong" answer here is to try to tell someone they are "wrong" for hedging. That's nonsense. You can take your EV and shove it if you think I'm wrong for hedging in scenario #6. I'm taking my $200,000 profit and calling it a day.

In the end, Cyclones decided taking home a few grand was worth more to him than letting EV tell him otherwise. I would have done the same. And it would be equally fine if someone decided not to hedge. It's all about what that money means to you. As he stated, he's not doing this on a regular basis. If he were, then he should not be hedging. But in a one time instance, EV is mostly irrelevant compared to the actual amount of money at stake.

 

[Bobcat10]

A whole lot of dumb arguing going on in here for something pretty simple.

Its a one off bet and the guy wanted to hedge. He either wants to lock in some winnings or he doesn't. Whether it is +EV or not is irrelevant.

Exactly. Simple logic. Personal preference. This thread is hilarious.

 

[DrJ]

That is the only place where the math would be relevant. Was he better taking +3 and have the shot at a winning both or taking the +money.

Right, but even that you can't prove with absolute certainty, because you can't prove the exact percentage chance that Kentucky wins by 1, 2 or 3.

The BEST bet was likely the Uconn moneyline for like $3,500 to win roughly $4,500. But that isn't iron clad.

But I don't think any of the self anointed "sharps" in this thread are even arguing that I made the incorrect hedge, they are saying I shouldn't have hedged period. If I knew with certainty that every day for a year I would wake up in the morning, deposit $200 into something and subsequently have a ~60% chance of winning $8000 or a 100% chance at $4000, I'd have more money at the end of the year if I went for the $8000 every day.

There are two problems with this - 1) I don't believe UK really had a ~60% to win this game. 2) This was a one shot deal. It's highly likely that I will never be holding a 40-1 ticket in my hands for a team in the national title game again for the rest of my life.

Analyzing the final bet in a vacuum, your Kentucky wager is basically irrelevant. That's one thing that I will agree with ghostguy on. If you actually felt that the uconn play was favorable by itself, it is possible to increase your EV while minimizing your variance. This actually is possible. But that wasn't your motivation for making said bet - it was specifically to minimize your variance. The guy taking the wager is going to make money long term if your bet is actually a coin flip, that's how it works. So you clearly were sacrificing EV (or were at least willing to sacrifice EV) to minimize your variance. Assuming that's the case, you really shouldn't have been making the original Kentucky bet in the first place. It was out of your league bankroll wise.

The goal of gambling is to win money - long term. To maximize your chances of that, you want to make the best plays possible from an EV perspective while not exposing your bankroll to too much of the inevitable variance that is going to happen. Any other strategy is going to decrease your odds of winning long term and/or increase the possibility you will blow your roll and not be able to take on future +EV opportunities.

 

[Jalapanose]

I'll try once more to explain why EV has very little relevance in the scenario.

Let's assume the following. Which of these would you hedge?

1) You've put in $1. You have a chance to win $10 if KY wins and $0 if they lose. You can spend an additional $2 to guarantee winning $5.

2) You've put in $10. You have a chance to win $100 if KY wins and $0 if they lose. You can spend an additional $20 to guarantee winning $50.

3) You've put in $100. You have a chance to win $1,000 if KY wins and $0 if they lose. You can spend an additional $200 to guarantee winning $500.

4) You've put in $1000. You have a chance to win $10,000 if KY wins and $0 if they lose. You can spend an additional $2000 to guarantee winning $5000.

5) You've put in $10000. You have a chance to win $100,000 if KY wins and $0 if they lose. You can spend an additional $20,000 to guarantee winning $50000.

6) You've put in $100000. You have a chance to win $1,000,000 if KY wins and $0 if they lose. You can spend an additional $200,000 to guarantee winning $500,000.

Exact same EV for every one of those scenarios. The only difference is the amount of money involved. When we're talking $10, not a big deal, no one is hedging there. When you get to scenario #6, most everyone is hedging. Even though EV tells you not to. Why? Because the amount of money matters more than EV. And this is going to be different for every person. You ask a homeless person on the street and he might be hedging #2 if he could. You ask Donald Trump and he may not hedge any one of those. It all depends on the person.

But, there is no right or wrong answer on whether or not you should hedge. It can be -EV and still ok to hedge if that's what you feel comfortable with. The only "wrong" answer here is to try to tell someone they are "wrong" for hedging. That's nonsense. You can take your EV and shove it if you think I'm wrong for hedging in scenario #6. I'm taking my $200,000 profit and calling it a day.

In the end, Cyclones decided taking home a few grand was worth more to him than letting EV tell him otherwise. I would have done the same. And it would be equally fine if someone decided not to hedge. It's all about what that money means to you. As he stated, he's not doing this on a regular basis. If he were, then he should not be hedging. But in a one time instance, EV is mostly irrelevant compared to the actual amount of money at stake.

Do you honestly believe that!?! HFS I have an uphill battle here, lol

 

[lumpy19]

Do you honestly believe that!?! HFS I have an uphill battle here, lol

I don't know why you keep fighting. Some people just aren't going to get it.

 

[gianmarco]

That is the only place where the math would be relevant. Was he better taking +3 and have the shot at a winning both or taking the +money.

Right, but even that you can't prove with absolute certainty, because you can't prove the exact percentage chance that Kentucky wins by 1, 2 or 3.

The BEST bet was likely the Uconn moneyline for like $3,500 to win roughly $4,500. But that isn't iron clad.

But I don't think any of the self anointed "sharps" in this thread are even arguing that I made the incorrect hedge, they are saying I shouldn't have hedged period. If I knew with certainty that every day for a year I would wake up in the morning, deposit $200 into something and subsequently have a ~60% chance of winning $8000 or a 100% chance at $4000, I'd have more money at the end of the year if I went for the $8000 every day.

There are two problems with this - 1) I don't believe UK really had a ~60% to win this game. 2) This was a one shot deal. It's highly likely that I will never be holding a 40-1 ticket in my hands for a team in the national title game again for the rest of my life.

Analyzing the final bet in a vacuum, your Kentucky wager is basically irrelevant. That's one thing that I will agree with ghostguy on. If you actually felt that the uconn play was favorable by itself, it is possible to increase your EV while minimizing your variance. This actually is possible. But that wasn't your motivation for making said bet - it was specifically to minimize your variance. The guy taking the wager is going to make money long term if your bet is actually a coin flip, that's how it works. So you clearly were sacrificing EV (or were at least willing to sacrifice EV) to minimize your variance. Assuming that's the case, you really shouldn't have been making the original Kentucky bet in the first place. It was out of your league bankroll wise.

The goal of gambling is to win money - long term. To maximize your chances of that, you want to make the best plays possible from an EV perspective while not exposing your bankroll to too much of the inevitable variance that is going to happen. Any other strategy is going to decrease your odds of winning long term and/or increase the possibility you will blow your roll and not be able to take on future +EV opportunities.

The bolded above are two very presumptuous statements. First of all, he can make any bet he wants whether or not it's in his league "bankroll wise". Because the goal of gambling is different for everyone. Some people like to bet on their teams. Some people have weird dreams. Some people do it for a living. Not everyone's goals are the same. Especially not "long term" because some people only gamble occasionally. If you are a long term gambler and are trying to maximize your profits, then sure, that's the goal. But someone else's goal may be that they are in Vegas while the game is going down and want to have some kind of rooting interest. Their goal is no less "right" than yours might be.

 

[[icon]]

you really shouldn't have been making the original Kentucky bet in the first place. It was out of your league bankroll wise.

Seee... that's what's so silly about this stance. Guy made a normal sized play at long odds. The initial bet was in NO WAY out of his league bankroll risk wise. However once those long odds were looking like they might come in, the win was a significant enough, in comparison to his bankroll, that he asked on advice on how to hedge to lock in some of that equity.

That concept seems lost on the EV slaves.

 

[Jalapanose]

Do you honestly believe that!?! HFS I have an uphill battle here, lol

I don't know why you keep fighting. Some people just aren't going to get it.

I'm out of likes for the day, excellent point - thanks for the advice, I'm outta here.....except to solve the problem with ghost's probability like I said I would.

 

[Cyclones]

That is the only place where the math would be relevant. Was he better taking +3 and have the shot at a winning both or taking the +money.

Right, but even that you can't prove with absolute certainty, because you can't prove the exact percentage chance that Kentucky wins by 1, 2 or 3.

The BEST bet was likely the Uconn moneyline for like $3,500 to win roughly $4,500. But that isn't iron clad.

But I don't think any of the self anointed "sharps" in this thread are even arguing that I made the incorrect hedge, they are saying I shouldn't have hedged period. If I knew with certainty that every day for a year I would wake up in the morning, deposit $200 into something and subsequently have a ~60% chance of winning $8000 or a 100% chance at $4000, I'd have more money at the end of the year if I went for the $8000 every day.

There are two problems with this - 1) I don't believe UK really had a ~60% to win this game. 2) This was a one shot deal. It's highly likely that I will never be holding a 40-1 ticket in my hands for a team in the national title game again for the rest of my life.

Analyzing the final bet in a vacuum, your Kentucky wager is basically irrelevant. That's one thing that I will agree with ghostguy on. If you actually felt that the uconn play was favorable by itself, it is possible to increase your EV while minimizing your variance. This actually is possible. But that wasn't your motivation for making said bet - it was specifically to minimize your variance. The guy taking the wager is going to make money long term if your bet is actually a coin flip, that's how it works. So you clearly were sacrificing EV (or were at least willing to sacrifice EV) to minimize your variance. Assuming that's the case, you really shouldn't have been making the original Kentucky bet in the first place. It was out of your league bankroll wise.

The goal of gambling is to win money - long term. To maximize your chances of that, you want to make the best plays possible from an EV perspective while not exposing your bankroll to too much of the inevitable variance that is going to happen. Any other strategy is going to decrease your odds of winning long term and/or increase the possibility you will blow your roll and not be able to take on future +EV opportunities.

Wait, so my motivation for making the bet affects the math?

 

[[icon]]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

So by hedging to lock in a portion of equity, he's "folding" and giving up 100% of pot equity?

You really shouldn't be drinking this early in the morning.

 

[Henry Ford]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

 

[Sweet J]

I'll try once more to explain why EV has very little relevance in the scenario.

Let's assume the following. Which of these would you hedge?

1) You've put in $1. You have a chance to win $10 if KY wins and $0 if they lose. You can spend an additional $2 to guarantee winning $5.

2) You've put in $10. You have a chance to win $100 if KY wins and $0 if they lose. You can spend an additional $20 to guarantee winning $50.

3) You've put in $100. You have a chance to win $1,000 if KY wins and $0 if they lose. You can spend an additional $200 to guarantee winning $500.

4) You've put in $1000. You have a chance to win $10,000 if KY wins and $0 if they lose. You can spend an additional $2000 to guarantee winning $5000.

5) You've put in $10000. You have a chance to win $100,000 if KY wins and $0 if they lose. You can spend an additional $20,000 to guarantee winning $50000.

6) You've put in $100000. You have a chance to win $1,000,000 if KY wins and $0 if they lose. You can spend an additional $200,000 to guarantee winning $500,000.

Exact same EV for every one of those scenarios. The only difference is the amount of money involved. When we're talking $10, not a big deal, no one is hedging there. When you get to scenario #6, most everyone is hedging. Even though EV tells you not to. Why? Because the amount of money matters more than EV. And this is going to be different for every person. You ask a homeless person on the street and he might be hedging #2 if he could. You ask Donald Trump and he may not hedge any one of those. It all depends on the person.

But, there is no right or wrong answer on whether or not you should hedge. It can be -EV and still ok to hedge if that's what you feel comfortable with. The only "wrong" answer here is to try to tell someone they are "wrong" for hedging. That's nonsense. You can take your EV and shove it if you think I'm wrong for hedging in scenario #6. I'm taking my $200,000 profit and calling it a day.

In the end, Cyclones decided taking home a few grand was worth more to him than letting EV tell him otherwise. I would have done the same. And it would be equally fine if someone decided not to hedge. It's all about what that money means to you. As he stated, he's not doing this on a regular basis. If he were, then he should not be hedging. But in a one time instance, EV is mostly irrelevant compared to the actual amount of money at stake.

nice post.

 

[the moops]

Cy was crazy to hedge that bet last night.

Like 3500 dollars in his pocket crazy?

 

[DrJ]

That is the only place where the math would be relevant. Was he better taking +3 and have the shot at a winning both or taking the +money.

Right, but even that you can't prove with absolute certainty, because you can't prove the exact percentage chance that Kentucky wins by 1, 2 or 3.

The BEST bet was likely the Uconn moneyline for like $3,500 to win roughly $4,500. But that isn't iron clad.

But I don't think any of the self anointed "sharps" in this thread are even arguing that I made the incorrect hedge, they are saying I shouldn't have hedged period. If I knew with certainty that every day for a year I would wake up in the morning, deposit $200 into something and subsequently have a ~60% chance of winning $8000 or a 100% chance at $4000, I'd have more money at the end of the year if I went for the $8000 every day.

There are two problems with this - 1) I don't believe UK really had a ~60% to win this game. 2) This was a one shot deal. It's highly likely that I will never be holding a 40-1 ticket in my hands for a team in the national title game again for the rest of my life.

Analyzing the final bet in a vacuum, your Kentucky wager is basically irrelevant. That's one thing that I will agree with ghostguy on. If you actually felt that the uconn play was favorable by itself, it is possible to increase your EV while minimizing your variance. This actually is possible. But that wasn't your motivation for making said bet - it was specifically to minimize your variance. The guy taking the wager is going to make money long term if your bet is actually a coin flip, that's how it works. So you clearly were sacrificing EV (or were at least willing to sacrifice EV) to minimize your variance. Assuming that's the case, you really shouldn't have been making the original Kentucky bet in the first place. It was out of your league bankroll wise.

The goal of gambling is to win money - long term. To maximize your chances of that, you want to make the best plays possible from an EV perspective while not exposing your bankroll to too much of the inevitable variance that is going to happen. Any other strategy is going to decrease your odds of winning long term and/or increase the possibility you will blow your roll and not be able to take on future +EV opportunities.

Wait, so my motivation for making the bet affects the math?

It doesn't effect the math of a given play, that is what it is. What it effects is the probability of you actually making +EV plays, and as a result giving yourself the best odds at winning money long term.

 

[Aaron Rudnicki]

I'm willing to believe people that say hedging is almost always the wrong move, but I haven't read a compelling case from anyone in here so far that makes that point.

Why is reduced variance and guaranteed profit a bad play in this situation? What if the 8k in winnings here was the largest bet he'll ever potentially win and he's normally a low stakes gambler? What if he's a Kentucky fan and he wants to make a misery hedge because if Kentucky wins he's happy and he wins money, but if Kentucky loses he's going to be super pissed that his team lost AND he lost what was basically free money at that point?

 

[munga30]

Cy was crazy to hedge that bet last night.

Like 3500 dollars in his pocket crazy?

He did not have 3500 in his pocket until *after* he hedged.

 

[munga30]

I'm willing to believe people that say hedging is almost always the wrong move, but I haven't read a compelling case from anyone in here so far that makes that point.

Why is reduced variance and guaranteed profit a bad play in this situation? What if the 8k in winnings here was the largest bet he'll ever potentially win and he's normally a low stakes gambler? What if he's a Kentucky fan and he wants to make a misery hedge because if Kentucky wins he's happy and he wins money, but if Kentucky loses he's going to be super pissed that his team lost AND he lost what was basically free money at that point?

Because you spend expectation to get it. You'll suffer bigger swings and need a bigger roll to stave off ruin.

 

[Aaron Rudnicki]

I'm willing to believe people that say hedging is almost always the wrong move, but I haven't read a compelling case from anyone in here so far that makes that point.

Why is reduced variance and guaranteed profit a bad play in this situation? What if the 8k in winnings here was the largest bet he'll ever potentially win and he's normally a low stakes gambler? What if he's a Kentucky fan and he wants to make a misery hedge because if Kentucky wins he's happy and he wins money, but if Kentucky loses he's going to be super pissed that his team lost AND he lost what was basically free money at that point?

Because you spend expectation to get it. You'll suffer bigger swings and need a bigger roll to stave off ruin.

you lost me

 

[DrJ]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

There's plenty of variables - the cards are dealt entirely randomly. These mathematical concepts are universal across all games of chance.

 

[Cliff Clavin]

I'm willing to believe people that say hedging is almost always the wrong move, but I haven't read a compelling case from anyone in here so far that makes that point.

Why is reduced variance and guaranteed profit a bad play in this situation? What if the 8k in winnings here was the largest bet he'll ever potentially win and he's normally a low stakes gambler? What if he's a Kentucky fan and he wants to make a misery hedge because if Kentucky wins he's happy and he wins money, but if Kentucky loses he's going to be super pissed that his team lost AND he lost what was basically free money at that point?

Because you spend expectation to get it. You'll suffer bigger swings and need a bigger roll to stave off ruin.

How does this apply to a one off bet? Seems to me he'd have a bigger swing ($8K or $0) by not hedging. He staved off ruin (not winning anything) by hedging.

 

[DrJ]

I'm willing to believe people that say hedging is almost always the wrong move, but I haven't read a compelling case from anyone in here so far that makes that point.

Why is reduced variance and guaranteed profit a bad play in this situation? What if the 8k in winnings here was the largest bet he'll ever potentially win and he's normally a low stakes gambler? What if he's a Kentucky fan and he wants to make a misery hedge because if Kentucky wins he's happy and he wins money, but if Kentucky loses he's going to be super pissed that his team lost AND he lost what was basically free money at that point?

I never said it was always the wrong move to place a bet counter to an existing bet you have out there. If you think that bet is a good bet (+EV) on its own merit, you should make it. But making bets with the express purpose of limiting your variance (hedging) isn't doing that.

The books are making money off of taking these bets - there's a built in disadvantage to you probability wise. If you simply play a bunch of coin flips you are going to lose money long term - you need to be able to beat that built in edge to make money.

 

[Aaron Rudnicki]

I'm willing to believe people that say hedging is almost always the wrong move, but I haven't read a compelling case from anyone in here so far that makes that point.

Why is reduced variance and guaranteed profit a bad play in this situation? What if the 8k in winnings here was the largest bet he'll ever potentially win and he's normally a low stakes gambler? What if he's a Kentucky fan and he wants to make a misery hedge because if Kentucky wins he's happy and he wins money, but if Kentucky loses he's going to be super pissed that his team lost AND he lost what was basically free money at that point?

I never said it was always the wrong move to place a bet counter to an existing bet you have out there. If you think that bet is a good bet (+EV) on its own merit, you should make it. But making bets with the express purpose of limiting your variance isn't doing that.

The books are making money off of taking these bets - there's a built in disadvantage to you probability wise. If you simply play a bunch of coin flips you are going to lose money long term - you need to be able to beat that built in edge to make money.

longshots are longshots for a reason. if you bet a bunch that make it this close but don't come through AND you never hedge, you're going to go broke. BUT, if you make reasonable hedges when the opportunity presents itself, you get a great chance to lock in guaranteed profit and I think you can win money over time.

in this case though, it's a one-time situation and he made himself a few grand by doing so. probably helped offset the pain of seeing his team lose in the final.

most times I make futures bets, it's because I know I'll have a chance to hedge later on if it gets close. it's part of my strategy for making bets like this.

 

[Henry Ford]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

There's plenty of variables - the cards are dealt entirely randomly. These mathematical concepts are universal across all games of chance.

Basketball isn't a game of chance. That's sort of the point.

 

[munga30]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

There's plenty of variables - the cards are dealt entirely randomly. These mathematical concepts are universal across all games of chance.

Basketball isn't a game of chance. That's sort of the point.

There's a distribution of outcomes. Wa la! Game of chance.

 

[Henry Ford]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

There's plenty of variables - the cards are dealt entirely randomly. These mathematical concepts are universal across all games of chance.

Basketball isn't a game of chance. That's sort of the point.

There's a distribution of outcomes. Wa la! Game of chance.

Sure, just give me the mathematical formula for that, and we're good.

A game of chance involves a randomizing agent - 52 cards, shuffled, a ball dropped into a spinning wheel, etc. While it is somewhat random who gets a foul called on him in today's basketball, it doesn't make it a game of chance.

 

[DrJ]

I'm willing to believe people that say hedging is almost always the wrong move, but I haven't read a compelling case from anyone in here so far that makes that point.

Why is reduced variance and guaranteed profit a bad play in this situation? What if the 8k in winnings here was the largest bet he'll ever potentially win and he's normally a low stakes gambler? What if he's a Kentucky fan and he wants to make a misery hedge because if Kentucky wins he's happy and he wins money, but if Kentucky loses he's going to be super pissed that his team lost AND he lost what was basically free money at that point?

I never said it was always the wrong move to place a bet counter to an existing bet you have out there. If you think that bet is a good bet (+EV) on its own merit, you should make it. But making bets with the express purpose of limiting your variance isn't doing that.

The books are making money off of taking these bets - there's a built in disadvantage to you probability wise. If you simply play a bunch of coin flips you are going to lose money long term - you need to be able to beat that built in edge to make money.

longshots are longshots for a reason. if you bet a bunch that make it this close but don't come through AND you never hedge, you're going to go broke. BUT, if you make reasonable hedges when the opportunity presents itself, you get a great chance to lock in guaranteed profit and I think you can win money over time.

in this case though, it's a one-time situation and he made himself a few grand by doing so. probably helped offset the pain of seeing his team lose in the final.

most times I make futures bets, it's because I know I'll have a chance to hedge later on if it gets close. it's part of my strategy for making bets like this.

Not if you manage your bankroll reasonably. Yes, these are high variance plays. So you want to expose less of your bankroll to them so that you don't have too much variance in your portfolio. This is what I'm saying when I suggest he shouldn't have even made the original play given this fact. The fact that he was wanting to back down indicates that he exposed too much of his bankroll to too much risk, he's afraid of the variance after it's actually been limited gigantically compared to his original bet.

We can go on the flip side. You're up against Phil Ivey on the river and everyone's cards are exposed. He's winning, you have 1 out. You put him all in for his entire net worth. Should he go in? He has about a 98% chance of winning this, and he's fully aware of that fact. No, he shouldn't go in, because that's not good bankroll management. 2% of the time he's going to lose EVERYTHING he has. If he makes this play enough times, that will eventually happen to him. Phil Ivey shouldn't have even been playing for these stakes to begin with.

All this being said, I do agree with you guys on the fact that sound gambling strategy wasn't what caused Cyclones to make his original bet. So a hedge is probably a good idea - he got himself in a position he really had no business being in and tucking his tail was probably a good idea.

 

[DrJ]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

There's plenty of variables - the cards are dealt entirely randomly. These mathematical concepts are universal across all games of chance.

Basketball isn't a game of chance. That's sort of the point.

You just droned on about how many variables outside of skill effect the game.

 

[Henry Ford]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

There's plenty of variables - the cards are dealt entirely randomly. These mathematical concepts are universal across all games of chance.

Basketball isn't a game of chance. That's sort of the point.

You just droned on about how many variables outside of skill effect the game.

Again - variables don't turn something into a game of chance.

 

[DrJ]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

There's plenty of variables - the cards are dealt entirely randomly. These mathematical concepts are universal across all games of chance.

Basketball isn't a game of chance. That's sort of the point.

You just droned on about how many variables outside of skill effect the game.

Again - variables don't turn something into a game of chance.

We were talking about the act of betting on the game anyways.

 

[Henry Ford]

We were talking about the act of betting on the game anyways.

Betting on something doesn't make it a game of chance.

 

[Aaron Rudnicki]

Not if you manage your bankroll reasonably. Yes, these are high variance plays. So you want to expose less of your bankroll to them so that you don't have too much variance in your portfolio. This is what I'm saying when I suggest he shouldn't have even made the original play given this fact. The fact that he was wanting to back down indicates that he exposed too much of his bankroll to too much risk, he's afraid of the variance after it's actually been limited gigantically compared to his original bet.

Disagree completely.

the reasoning for heding (IMO) is not because you are worried about losing the money you have invested at all..it's because when a bet gets that close, you don't want to risk walking away with nothing. at some point, it makes sense to convert that ticket into guaranteed profit rather than letting it all ride. winning ~50% all the time is better than winning 0% half the time IMO (in these types of situations).

 

[DrJ]

We were talking about the act of betting on the game anyways.

Betting on something doesn't make it a game of chance.

That still doesn't make anything you've said any less dumb.

 

[Henry Ford]

We were talking about the act of betting on the game anyways.

Betting on something doesn't make it a game of chance.

That still doesn't make anything you've said any less dumb.

I'm happy to seem dumb to someone who doesn't understand the difference between betting on a card game and betting on a basketball game.

 

[DrJ]

Not if you manage your bankroll reasonably. Yes, these are high variance plays. So you want to expose less of your bankroll to them so that you don't have too much variance in your portfolio. This is what I'm saying when I suggest he shouldn't have even made the original play given this fact. The fact that he was wanting to back down indicates that he exposed too much of his bankroll to too much risk, he's afraid of the variance after it's actually been limited gigantically compared to his original bet.

Disagree completely.

the reasoning for heding (IMO) is not because you are worried about losing the money you have invested at all..it's because when a bet gets that close, you don't want to risk walking away with nothing. at some point, it makes sense to convert that ticket into guaranteed profit rather than letting it all ride. winning ~50% all the time is better than winning 0% half the time.

Winning 8K 50% of the time is better than winning 3500 100% of the time.

 

[munga30]

The poker analogy was spot-on, you're crazy to fold preflop with those pot odds just as Cy was crazy to hedge that bet last night.

Ghost, you keep alluding to this incorrect moneyline that I used in my calculations. For our next experiment, I'm totally willing to look past the fact that if you're that good at exploiting efficient markets that you'd be typing replies from your own island. Instead I want you, after the game has already been played, to give me what the moneyline should have been/your estimate of what uconn's probability of winning SHOULD have been. Again, all of this is after the game has been played. Please be realistic is all that I ask (i.e. Don't say uconn was 100% to win the game) I will then show you the entire EV equation from both viewpoints and how the hedge was wrong.

Have some time to kill and look forward to it.

College basketball games aren't the same as card games. Cards don't get tired, don't get the flu, don't have their girlfriends break up with them before the game, don't have a fight with their mom and dad before the game, don't break ankles, don't get injured during the game, and it doesn't matter how young the pack is.

There are substantially more variables in a basketball game which are not in the house's control or the bettor's control.

There's plenty of variables - the cards are dealt entirely randomly. These mathematical concepts are universal across all games of chance.

Basketball isn't a game of chance. That's sort of the point.

There's a distribution of outcomes. Wa la! Game of chance.

Sure, just give me the mathematical formula for that, and we're good.A game of chance involves a randomizing agent - 52 cards, shuffled, a ball dropped into a spinning wheel, etc. While it is somewhat random who gets a foul called on him in today's basketball, it doesn't make it a game of chance.

They both have a probability distribution of results. Just because I make poor estimates of NBA results probability distributions and better estimates of holdem river card distributions and exact estimates of roulette wheel distributions doesn't mean they don't all share that property.

 

[Aaron Rudnicki]

he got himself in a position he really had no business being in and tucking his tail was probably a good idea.

this is a ridiculous thing to take from this thread.

He's a KENTUCKY fan who bet on his team to win. Tons of people do this and they almost never work out. But his team actually got to the championship game when nobody expected them to get to the Sweet 16. Why let it ride when you can lock in a huge profit on his original bet with no risk whatsoever on what a group of freshman college kids will do? You have no way to know how the refs will call the game...who will shoot well or not shoot well, etc. Why let it all ride when you don't have to?

If he was really scared, he would have hedged by playing the UConn ML but he went for a middle instead.

 

[Cliff Clavin]

Not if you manage your bankroll reasonably. Yes, these are high variance plays. So you want to expose less of your bankroll to them so that you don't have too much variance in your portfolio. This is what I'm saying when I suggest he shouldn't have even made the original play given this fact. The fact that he was wanting to back down indicates that he exposed too much of his bankroll to too much risk, he's afraid of the variance after it's actually been limited gigantically compared to his original bet.

Disagree completely.

the reasoning for heding (IMO) is not because you are worried about losing the money you have invested at all..it's because when a bet gets that close, you don't want to risk walking away with nothing. at some point, it makes sense to convert that ticket into guaranteed profit rather than letting it all ride. winning ~50% all the time is better than winning 0% half the time.

Winning 8K 50% of the time is better than winning 3500 100% of the time.

Why do you assume a basketball game would be won by one team 50% of the time?