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

[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.

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.

Well, you look pretty dumb to someone that understands that betting on games that you have no control over the outcome is the same as betting on games that you have no control over the outcome.

 

[munga30]

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).

And what happens when you do this is you tend to have less money for making subsequent bets and covering all the times that you make bets that don't do well enough to present hedging opportunities.

 

[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.

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

Why does that matter?

 

[Aaron Rudnicki]

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

well, he could have played the UConn ML and come closer to a 50% outcome I think. He was more aggressive and tried to play for a middle. Still think he's probably happy with his decision.

 

[DrJ]

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.

Fine, if it made him happy enough to place the bet there's some "inherrent value" in that. We could argue that piling up my life savings and setting it on fire is a good move if I get enough enjoyment out of it, I suppose. But it's not a sound fiscal strategy.

 

[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.

Well, you look pretty dumb to someone that understands that betting on games that you have no control over the outcome is the same as betting on games that you have no control over the outcome.

And you look pretty dumb to someone who realizes that hedging a bet on a mathematically reducible randomizing agent is different from hedging a bet on a team game of skill.

 

[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?

Why does that matter?

Seriously?

 

[DrJ]

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

well, he could have played the UConn ML and come closer to a 50% outcome I think. He was more aggressive and tried to play for a middle. Still think he's probably happy with his decision.

Of course - in this sample size of one it worked out. So using results based analysis, it was the "right move".

 

[munga30]

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.

No, he already told us that $200 wasn't a big deal. His problem is thinking that he had ~$3500 (or whatever the hedge position would yield) *before* he placed the hedge and thinking of it in terms of wagering $3500.

 

[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.

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

Why does that matter?

Seriously?

Yes, seriously. How does that have much of anything to do with my statement.

 

[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.

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.

Well, you look pretty dumb to someone that understands that betting on games that you have no control over the outcome is the same as betting on games that you have no control over the outcome.

And you look pretty dumb to someone who realizes that hedging a bet on a mathematically reducible randomizing agent is different from hedging a bet on a team game of skill.

It's not your skill that determines either of these outcomes. From your perspective it is a random event outside of your control.

 

[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.

Fine, if it made him happy enough to place the bet there's some "inherrent value" in that. We could argue that piling up my life savings and setting it on fire is a good move if I get enough enjoyment out of it, I suppose. But it's not a sound fiscal strategy.

if the UConn ML was +130 or so, he could have put 3 grand on that.

Kentucky wins = he's up $5000 or so

UConn wins = he's up $3900 or so.

what's wrong with that? giving up $3k in potential profit for a guaranteed profit of $3900 (minus whatever he lost on his initial UK bet)?

 

[DrJ]

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.

Fine, if it made him happy enough to place the bet there's some "inherrent value" in that. We could argue that piling up my life savings and setting it on fire is a good move if I get enough enjoyment out of it, I suppose. But it's not a sound fiscal strategy.

if the UConn ML was +130 or so, he could have put 3 grand on that.

Kentucky wins = he's up $5000 or so

UConn wins = he's up $3900 or so.

what's wrong with that? giving up $3k in potential profit for a guaranteed profit of $3900 (minus whatever he lost on his initial UK bet)?

Nothing is wrong with that if he believes that the bet on UCONN is a money making play on its own merit. If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

 

[hagmania]

I get the feeling that Cyclones is not looking for long-term bankroll management (forgive me if I'm wrong).

The circumstances of the story were that he made this bet on a dare from a buddy, and lo and behold it's going to cash, which presents us with the hedge scenario.

I completely get why hedging is bad for your bankroll, but I don't think you're taking the full context of Cyclones' story here.

 

[QuizGuy66]

So the EV folks here, if they had gone 60 for 60 in the Buffet Bracket, would have turned down an offer of, say, $200,000,000 at the start of the final 4 and instead let it ride for $1,000,000,000. Certainly fun in terms of the excitement of watching the game, but I'm more risk averse than them

-QG

 

[Aaron Rudnicki]

If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

why?

 

[DrJ]

If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

why?

Because you lose money making a bunch of coin flip plays.

 

[ghostguy123]

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.

I already said it should have been a pickem, about as close to 50-50 as you can get.

I TRIED to bet on Uconn but the stupid bookie my friend uses doesn't take parlays.

So in this case, considering I was personally wanting to bet on Uconn, I think they had maybe a 50-55% chance of winning. Just my personal opinion. I felt getting 3 points that Uconn was about a 60% chance to either win or lose by 3 or less.

I didn't bet Uconn because I felt the UNDER has a slightly better chance at happening, which it did my a lot.

And no, I never said I was soooooooo good at gambling that I will have my own island. But in the 15 years I have gambled on sports, mainly NFL with some college football, plus over/unders on college basketball, I am up thousands. Hard to know exactly how far up I am, but in those 15 years it is at least 25-30 grand.

I don't bet on every ####### game. Some weeks in the NFL nothing looks good. Same with the other sports, some weeks or even months nothing looks good. Some weeks a few things look good.

To figure out what I am going to bet, I look at the schedule and make my own personal "lines". Then I check the lines on the website I use and bet the games that are far off what my own projections are. This has been quite successful for me, for a long period of time.

The key to winning, obviously, is being able to pick winners. But you have to pick them at a good enough percentage relative to the lines the sportsbook is giving you.

Here is a question for YOU now.......if Cyclone really felt Uconn was going to win this game, what would you have thought about him betting about 7 grand on the moneyline at +135 (enough so that if Kentucky won, he would at least get back the original 700 he bet)...................SO if uconn won he would get around 9 grand, and if Kentucky won he would have been up like 300 bucks.

If you say that "the math" makes that a bad decision because the Kentucky moneyline was -140, I probably will laugh so hard I piss myself.

 

[Aaron Rudnicki]

If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

why?

Because you lose money making a bunch of coin flip plays.

it's not a 'coin flip' play though. it's taking a coin flip play and converting into a sure thing.

 

[DrJ]

So the EV folks here, if they had gone 60 for 60 in the Buffet Bracket, would have turned down an offer of, say, $200,000,000 at the start of the final 4 and instead let it ride for $1,000,000,000. Certainly fun in terms of the excitement of watching the game, but I'm more risk averse than them

-QG

I noted there's an appropriate time to sacrifice EV to hedge. One example is when you realize you've introduced too much variance into your portfolio for your liking, as Cyclones did when he made the original wager. It was appropriate to tuck his tail and run under those circumstances.

 

[DrJ]

If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

why?

Because you lose money making a bunch of coin flip plays.

it's not a 'coin flip' play though. it's taking a coin flip play and converting into a sure thing.

If you're not comfortable assigning a mathematical probability to the outcome, we might as well call it a coin flip. If you are comfortable offering up what you believe the probability is, we can run some EV calculations off of that.

 

[Dinsy Ejotuz]

Some folks in here need to read up on the idea of Utility.

 

[ghostguy123]

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

The bolded is true.

What is also true is that last nights game was not a game of chance.

get the picture on that yet?

 

[DrJ]

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

The bolded is true.

What is also true is that last nights game was not a game of chance.

get the picture on that yet?

Gambling on the outcome of last night's game is a game of chance. Get the picture on that yet?

 

[ghostguy123]

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.

So how would "letting it ride" in this case have beat the built in edge????

Because you can prove Kentucky would win that game like 590 times out of a 1000???

 

[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.

So how would "letting it ride" in this case have beat the built in edge????

Because you can prove Kentucky would win that game like 590 times out of a 1000???

The original bet is already placed. He doesn't gain or lose equity by keeping it, he has no choice in that matter once he placed the original bet.

 

[ghostguy123]

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.

Absolutely. Making initial bets with the intent to hedge later is a GREAT strategy in some situations.

If a team has long odds but you feel their chances are damn near as good as anyones, bet them at 20-1 or 50-1 or 10-1 or whatever the situation is that would dictate that being a good bet for you.

It doesn't mean just pick some random longshots. That will never work in the longrun. But if you aren't a compulsive gambler and have a bit of self control to only make bets that you truly believe are good bets, and you are actually GOOD at this sort of thing, you will be happy with the results.

I can't go to a casino and win consistently at roulette. No human alive can. But there are definitely people who have proven over time they can win money with sports gambling........................I am one of them, unfortunately a lower level one.

 

[Bill Brasky]

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.

So how would "letting it ride" in this case have beat the built in edge????

Because you can prove Kentucky would win that game like 590 times out of a 1000???

Hint> he's not talking about this one individual bet. He's operating under the assumption that he will make many futures bets over time.

 

[ghostguy123]

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

True.

Too bad you can't prove in any reasonable way that is what he was facing. You also left out the possibility of winning the full 8k and even 12k even after the hedge.

But had be bet the moneyline................winning $4,500 100% of the time is better than winning $8,000 50% of the time, right?

 

[parasaurolophus]

People are just pretending they don't know the difference between a basketball game and a blackjack game right?

The odds of winning one never change. The line on the other changes all the time and would likely have uconn as a favorite if they posted a line today for a game tonight.

 

[DrJ]

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.

Absolutely. Making initial bets with the intent to hedge later is a GREAT strategy in some situations.

If a team has long odds but you feel their chances are damn near as good as anyones, bet them at 20-1 or 50-1 or 10-1 or whatever the situation is that would dictate that being a good bet for you.

It doesn't mean just pick some random longshots. That will never work in the longrun. But if you aren't a compulsive gambler and have a bit of self control to only make bets that you truly believe are good bets, and you are actually GOOD at this sort of thing, you will be happy with the results.

I can't go to a casino and win consistently at roulette. No human alive can. But there are definitely people who have proven over time they can win money with sports gambling........................I am one of them, unfortunately a lower level one.

Actually it's a pretty horrible strategy. If you rode them out rather than sacrificing equity to reduce variance then you'd hit less often, but make more money on average. If you weren't comfortable with the variance then why bother placing longshot bets to begin with?

 

[lumpy19]

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.

please stop doing this

 

[DrJ]

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

True.

Too bad you can't prove in any reasonable way that is what he was facing. You also left out the possibility of winning the full 8k and even 12k even after the hedge.

But had be bet the moneyline................winning $4,500 100% of the time is better than winning $8,000 50% of the time, right?

None of this convoluted BS matters. Was the UCONN bet a good bet on its own merit? Then it should be made. If it wasn't, it shouldn't. The Kentucky bet has absolutely nothing to do with it.

 

[ghostguy123]

Well, you look pretty dumb to someone that understands that betting on games that you have no control over the outcome is the same as betting on games that you have no control over the outcome.

He understands that.

But he also understands that one game has set probabilities and one does NOT.

When I play roulette the probability of number 5 hitting on a spin is 1/38 on a double zero wheel.

When kentucky played Uconn last night the probability of them winning was.......ummm..........errr....................................

I am still waiting for the math equation telling me the probability of kentucky winning last night

 

[Nipsey]

It's like this: A man walks up to you on the street and says "I'm going to flip a coin. If it comes up heads, I'll hand you $60,000. If it comes up tails, you get nothing. Or I can just hand you $10,000 right now and walk away." I think any mathematician would tell you the "right" thing to do would be to tell the guy to flip the coin and take your chances. But if you need to redo your kitchen or your kid needs braces or something can you really be faulted for taking the 10K?

The hardcore gambling guys in this thread are coming off like Jeff Gordon trying to tell a random guy how to properly draft behind the car in front of you while driving on the freeway. The other side is coming off like the random guy telling Jeff Gordon he has no clue how to drive.

In this case the hedge "worked out". Long haul it's not going to be the "right" play but how many times is the OP going to be in that position again? Never?

 

[Cyclones]

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.

So how would "letting it ride" in this case have beat the built in edge????

Because you can prove Kentucky would win that game like 590 times out of a 1000???

Hint> he's not talking about this one individual bet. He's operating under the assumption that he will make many futures bets over time.

Which is where this thread jumped the shark.

Cyclones can't afford to lose $200

Cyclones is a ####ty bankroll manager

Cyclones will be presented with hundreds of these opportunities in the future

Kentucky is going to win this game 60% of the time

etc etc

A bunch of way off base assumptions. Cliff put it best and most succinctly - it was a one off bet where a hedge made sense.

 

[Dippa]

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.

So how would "letting it ride" in this case have beat the built in edge????

Because you can prove Kentucky would win that game like 590 times out of a 1000???

Hint> he's not talking about this one individual bet. He's operating under the assumption that he will make many futures bets over time.

That's quite the assumption, considering he said he only made the bet to prove a point to a friend.

 

[Aaron Rudnicki]

please stop doing this

why?

 

[ghostguy123]

It's not your skill that determines either of these outcomes. From your perspective it is a random event outside of your control.

Mike Tyson fighting a 90 year old lady is out of my control.........................I will bet on Tyson at -140

My skill level does not determine the outcome. Nobody said it did.

My skill determines where I am putting my money, if I decide to bet on the event.

 

[Cyclones]

It's not your skill that determines either of these outcomes. From your perspective it is a random event outside of your control.

Mike Tyson fighting a 90 year old lady is out of my control.........................I will bet on Tyson at -140

My skill level does not determine the outcome. Nobody said it did.

My skill determines where I am putting my money, if I decide to bet on the event.

https://www.youtube.com/results?search_query=family+guy+mike+tyson+vs+old+lady

I'll take that money now please.

 

[Sarnoff]

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

This is only because of the multi-game situation.

In a classic one-game hedge, where Cy would not have had to sweat the game before the championship, he would have been in a "8K 50% of the time or 4K 100% of the time" situation. It's only because of the previous 500 bet that it went from 4K to 3.5. And the 8K down to 7.5.

EV over the long run is the same in both "run it 100 times and never hedge" and "run it once and hedge" in a single-game 50/50 scenario.

 

[DrJ]

It's not your skill that determines either of these outcomes. From your perspective it is a random event outside of your control.

Mike Tyson fighting a 90 year old lady is out of my control.........................I will bet on Tyson at -140

My skill level does not determine the outcome. Nobody said it did.

My skill determines where I am putting my money, if I decide to bet on the event.

Right, but when you're betting simply to reduce variance and not based on your evaluation of the probability of the given outcome, you aren't using any of your skill.

 

[Bill Brasky]

please stop doing this

why?

just bet the ML

 

[ghostguy123]

Nothing is wrong with that if he believes that the bet on UCONN is a money making play on its own merit. If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

At some point you SERIOUSLY need to realize that Kentucky at -140 is irrelevant. You really, really do.

As for Cyclone, maybe you should ask him how confident he was that Kentucky would win last night. Clearly, not confident enough to let it ride.

And I would bet if you asked him what the odds would be for the game, he would have said 50-50................ask him and find out.

Once the line came out at +3 and moneyline of +135 for Uconn...................his decision was pretty easy, just a matter of deciding exactly which hedge to make.

If you personally would have let it ride, that's cool. Nothing wrong with that if you truly felt Kentucky had the better chance to win. I didn't. I don't think he really did either. I am sure he HOPED they did, but he was able to take off the homer glasses for 5 seconds and make a wise decision.

 

[lumpy19]

please stop doing this

why?

It's a terrible gambling "strategy" that's costing you money.

 

[ghostguy123]

I get the feeling that Cyclones is not looking for long-term bankroll management (forgive me if I'm wrong).

The circumstances of the story were that he made this bet on a dare from a buddy, and lo and behold it's going to cash, which presents us with the hedge scenario.

I completely get why hedging is bad for your bankroll, but I don't think you're taking the full context of Cyclones' story here.

I also don't think he is understanding this exact scenario, and instead is lumping all kinds of other unrelated scenarios into it to try and prove a point, which is a just very illogical.

 

[Dinsy Ejotuz]

Cyclone's behavior is rational, based on his risk aversion. Companies never bet all or nothing, unless they have to, no matter what odds they get. Because if you miss once you're out of business. So passing up a +EV decision often makes sense.

And in general a 100% chance of winning X is increasingly greater than a 50% chance of winning X/2 as the totals get large relative to how much the money means to you and how often you'll be in that situation. The larger the amount of money and the less frequently you're in that position the larger the premium you're willing to pay.

IOW... Cyclone's hedge is completely rational given that it's a fairly large sum and he's not in the business of making multi-thousand dollar bets ever day.

 

[DrJ]

Nothing is wrong with that if he believes that the bet on UCONN is a money making play on its own merit. If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

At some point you SERIOUSLY need to realize that Kentucky at -140 is irrelevant. You really, really do.

As for Cyclone, maybe you should ask him how confident he was that Kentucky would win last night. Clearly, not confident enough to let it ride.

And I would bet if you asked him what the odds would be for the game, he would have said 50-50................ask him and find out.

Once the line came out at +3 and moneyline of +135 for Uconn...................his decision was pretty easy, just a matter of deciding exactly which hedge to make.

If you personally would have let it ride, that's cool. Nothing wrong with that if you truly felt Kentucky had the better chance to win. I didn't. I don't think he really did either. I am sure he HOPED they did, but he was able to take off the homer glasses for 5 seconds and make a wise decision.

It's entirely relevant - it determines the odds that you are getting on your bet.

 

[ghostguy123]

If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

why?

Because you lose money making a bunch of coin flip plays.

This wasn't a coinflip play.

In fact, had he just decided to go with the moneyline, this was BETTER than a coinflip play with no juice.

Unless of course you truly believe Kentucky had a 59% chance to win.

 

[DrJ]

If he's doing it simply because he wants to reduce variance and has no concern for the probability of the event occurring it's a losing gambling strategy long term.

why?

Because you lose money making a bunch of coin flip plays.

This wasn't a coinflip play.

In fact, had he just decided to go with the moneyline, this was BETTER than a coinflip play with no juice.

Unless of course you truly believe Kentucky had a 59% chance to win.

Whether or not his bet was a good bet has to do with the odds he was getting, and how he felt about each team's chances. And absolutely nothing to do with the previous bet he made on Kentucky. That's the bottom line.