Gambling degenerates: East-West Hula Game 2 (1 Viewer)

[GiantsRule]

Went with a small parlay of the overs in both "all-star" college games on ESPN2 today. Got the first game at Over 45 (currently 24-21 late in the 3rd). I have the second game at Over 43. Not quite sure what the difference between the two games is, but some online books have the 2nd game dropping a bit (42 or 42.5). Normally, I'm a huge advocate of hedging in these spots since I believe in guaranteed money or "no risk gambling". But if there isn't a concernable difference between the two games, it may make sense to just let it ride.So basically, are the offenses much weaker (or defenses stronger) in the 2nd game and it makes sense to hedge, or is a mid-40s total just as possible in the 2nd game as we're seeing in the first?Thanks.

 

[FreeBaGeL]

I thought I had a serious problem, but you make me feel better.Kidding, of course.

 

[GiantsRule]

I thought I had a serious problem, but you make me feel better.

Kidding, of course.

Oh, no. I'm the poster boy for Gamblers Anonymous, no doubt.So, about the game...whaddya think?

 

[Finatic]

cha...ching......$$$$$$$$$$$

 

[GiantsRule]

cha...ching......$$$$$$$$$$$

I hedged. I'll either have a nice cushion for tomorrow, or a very small loss (just VIG).

 

[GiantsRule]

As always, you can't go wrong with hedging.

Nice f'n offensive output!

 

[jeff_eaglz]

Care to describe how you hedged for those of us non-degerate types?

 

[GiantsRule]

Care to describe how you hedged for those of us non-degerate types?

Placed a parlay (one bet on two games paying 13/5 (or 2.6 to 1) odds) on:Game 1: Over 45

Game 2: Over 43

Assume I bet $100. That's $100 to win $260.

The first part of the bet won easily. Since it went over early in the 4th quarter, I placed a bet on the opposite side of the 2nd game (Under 43) for the same amount as my initial wager ($110 paying $100).

That way, only three things could happen:

1. I win the parlay (+260) but lose some of the profit (-110) because I intentionally bet against myself as insurance in case I lost (WIN $150)

2. I lose the parlay (-100) but win the insurance bet (+100) and break even -- No harm, no foul

3. The 2nd game ends at exactly 43 points. The parlay gets pushed down to a straight wager (+91) and I get my money back for a push on the "hedge bet" (0). (WIN $91)

So the optimist will look at this scenario and say "why spend money to bet against yourself? You bet the money with the intention of winning the bet or losing. Now, if you win the bet, you take a lesser payoff".

The pessimist says "that would suck to win the first bet, get a step closer to cashing, only to end up with nothing at the end of the day. I'd sooner give back potential winnings knowing that if I lose the bet, I still don't lose any money."

Smart bettors ALWAYS follow the pessimist. It's smart money management.*

*--Although parlays are rarely ever smart.

 

[jeff_eaglz]

Care to describe how you hedged for those of us non-degerate types?

Placed a parlay (one bet on two games paying 13/5 (or 2.6 to 1) odds) on:Game 1: Over 45

Game 2: Over 43

Assume I bet $100. That's $100 to win $260.

The first part of the bet won easily. Since it went over early in the 4th quarter, I placed a bet on the opposite side of the 2nd game (Under 43) for the same amount as my initial wager ($110 paying $100).

That way, only three things could happen:

1. I win the parlay (+260) but lose some of the profit (-110) because I intentionally bet against myself as insurance in case I lost (WIN $150)

2. I lose the parlay (-100) but win the insurance bet (+100) and break even -- No harm, no foul

3. The 2nd game ends at exactly 43 points. The parlay gets pushed down to a straight wager (+91) and I get my money back for a push on the "hedge bet" (0). (WIN $91)

So the optimist will look at this scenario and say "why spend money to bet against yourself? You bet the money with the intention of winning the bet or losing. Now, if you win the bet, you take a lesser payoff".

The pessimist says "that would suck to win the first bet, get a step closer to cashing, only to end up with nothing at the end of the day. I'd sooner give back potential winnings knowing that if I lose the bet, I still don't lose any money."

Smart bettors ALWAYS follow the pessimist. It's smart money management.*

*--Although parlays are rarely ever smart.

very nice response. thanks.

 

[kutta]

Care to describe how you hedged for those of us non-degerate types?

Placed a parlay (one bet on two games paying 13/5 (or 2.6 to 1) odds) on:Game 1: Over 45

Game 2: Over 43

Assume I bet $100. That's $100 to win $260.

The first part of the bet won easily. Since it went over early in the 4th quarter, I placed a bet on the opposite side of the 2nd game (Under 43) for the same amount as my initial wager ($110 paying $100).

That way, only three things could happen:

1. I win the parlay (+260) but lose some of the profit (-110) because I intentionally bet against myself as insurance in case I lost (WIN $150)

2. I lose the parlay (-100) but win the insurance bet (+100) and break even -- No harm, no foul

3. The 2nd game ends at exactly 43 points. The parlay gets pushed down to a straight wager (+91) and I get my money back for a push on the "hedge bet" (0). (WIN $91)

So the optimist will look at this scenario and say "why spend money to bet against yourself? You bet the money with the intention of winning the bet or losing. Now, if you win the bet, you take a lesser payoff".

The pessimist says "that would suck to win the first bet, get a step closer to cashing, only to end up with nothing at the end of the day. I'd sooner give back potential winnings knowing that if I lose the bet, I still don't lose any money."

Smart bettors ALWAYS follow the pessimist. It's smart money management.*

*--Although parlays are rarely ever smart.

Not sure I agree with this.I put 500 on Carolina to win the NFC before the playoffs started at 9.5-1.

I am now getting 9.5 to one on this game - a game in which I think Carolina will win. It does not make sense for me to hedge and guarantee myself 1K no matter the outcome when I am getting 9.5 to 1 on Carolina.

 

[GiantsRule]

Care to describe how you hedged for those of us non-degerate types?

Placed a parlay (one bet on two games paying 13/5 (or 2.6 to 1) odds) on:Game 1: Over 45

Game 2: Over 43

Assume I bet $100. That's $100 to win $260.

The first part of the bet won easily. Since it went over early in the 4th quarter, I placed a bet on the opposite side of the 2nd game (Under 43) for the same amount as my initial wager ($110 paying $100).

That way, only three things could happen:

1. I win the parlay (+260) but lose some of the profit (-110) because I intentionally bet against myself as insurance in case I lost (WIN $150)

2. I lose the parlay (-100) but win the insurance bet (+100) and break even -- No harm, no foul

3. The 2nd game ends at exactly 43 points. The parlay gets pushed down to a straight wager (+91) and I get my money back for a push on the "hedge bet" (0). (WIN $91)

So the optimist will look at this scenario and say "why spend money to bet against yourself? You bet the money with the intention of winning the bet or losing. Now, if you win the bet, you take a lesser payoff".

The pessimist says "that would suck to win the first bet, get a step closer to cashing, only to end up with nothing at the end of the day. I'd sooner give back potential winnings knowing that if I lose the bet, I still don't lose any money."

Smart bettors ALWAYS follow the pessimist. It's smart money management.*

*--Although parlays are rarely ever smart.

Not sure I agree with this.I put 500 on Carolina to win the NFC before the playoffs started at 9.5-1.

I am now getting 9.5 to one on this game - a game in which I think Carolina will win. It does not make sense for me to hedge and guarantee myself 1K no matter the outcome when I am getting 9.5 to 1 on Carolina.

Um, actually it makes perfect sense! That's the whole reason you hedge. Why don't you ask the Colts how easy it is to lose a game that they should, for all intents and purposes, win? You only get 9.5 to 1 on Carolina IF CAROLINA WINS! That's not a sure thing by any means.In the example, you gave, you have the perfect opportunity to hedge and make good money either way you swing it. You can take $1,500 on the Seattle ML (assuming a -170 price tag). If Carolina wins, you take home $3,250 profit instead of $4,750. But, if Seattle wins, you get a consolation prize of $882.35.

If you don't hedge and Seattle wins, you rode a very nice ticket for absolutely nothing. That bigger payoff you didn't want to sacrifice is completely out the window.

The point is, you don't give away guaranteed money in gambling. Ever. It's foolish and greedy and you can't come out ahead that way. It's a no brainer. This isn't an opinion but fact. Gambling is a game of chance. Anything can happen, and you have as good a chance to lose as you do to win. But any time you have the opportunity to make GUARANTEED MONEY regardless of what happens, you don't give it up.

Smart gamblers hedge every time and don't look at the opportunities lost but rather the ones they took advantage of. Tonight, I proved it (although my example is far smaller than yours). If I didn't hedge, I would have lost money. Period. Instead, I took a small part of what would have been my winnings and put it on the opposite side in case I lost. I lost the original bet but didn't lose penny #1.

You can certainly do what you want and as a matter of fact, as someone that's a big supporter of Jake D. and John Fox, I hope you do win. But don't ever let gamblers' greed take over for gamblers' smarts.

 

[TwinTurbo]

Care to describe how you hedged for those of us non-degerate types?

Placed a parlay (one bet on two games paying 13/5 (or 2.6 to 1) odds) on:Game 1: Over 45

Game 2: Over 43

Assume I bet $100. That's $100 to win $260.

The first part of the bet won easily. Since it went over early in the 4th quarter, I placed a bet on the opposite side of the 2nd game (Under 43) for the same amount as my initial wager ($110 paying $100).

That way, only three things could happen:

1. I win the parlay (+260) but lose some of the profit (-110) because I intentionally bet against myself as insurance in case I lost (WIN $150)

2. I lose the parlay (-100) but win the insurance bet (+100) and break even -- No harm, no foul

3. The 2nd game ends at exactly 43 points. The parlay gets pushed down to a straight wager (+91) and I get my money back for a push on the "hedge bet" (0). (WIN $91)

So the optimist will look at this scenario and say "why spend money to bet against yourself? You bet the money with the intention of winning the bet or losing. Now, if you win the bet, you take a lesser payoff".

The pessimist says "that would suck to win the first bet, get a step closer to cashing, only to end up with nothing at the end of the day. I'd sooner give back potential winnings knowing that if I lose the bet, I still don't lose any money."

Smart bettors ALWAYS follow the pessimist. It's smart money management.*

*--Although parlays are rarely ever smart.

Not sure I agree with this.I put 500 on Carolina to win the NFC before the playoffs started at 9.5-1.

I am now getting 9.5 to one on this game - a game in which I think Carolina will win. It does not make sense for me to hedge and guarantee myself 1K no matter the outcome when I am getting 9.5 to 1 on Carolina.

Um, actually it makes perfect sense! That's the whole reason you hedge. Why don't you ask the Colts how easy it is to lose a game that they should, for all intents and purposes, win? You only get 9.5 to 1 on Carolina IF CAROLINA WINS! That's not a sure thing by any means.In the example, you gave, you have the perfect opportunity to hedge and make good money either way you swing it. You can take $1,500 on the Seattle ML (assuming a -170 price tag). If Carolina wins, you take home $3,250 profit instead of $4,750. But, if Seattle wins, you get a consolation prize of $882.35.

If you don't hedge and Seattle wins, you rode a very nice ticket for absolutely nothing. That bigger payoff you didn't want to sacrifice is completely out the window.

The point is, you don't give away guaranteed money in gambling. Ever. It's foolish and greedy and you can't come out ahead that way. It's a no brainer. This isn't an opinion but fact. Gambling is a game of chance. Anything can happen, and you have as good a chance to lose as you do to win. But any time you have the opportunity to make GUARANTEED MONEY regardless of what happens, you don't give it up.

Smart gamblers hedge every time and don't look at the opportunities lost but rather the ones they took advantage of. Tonight, I proved it (although my example is far smaller than yours). If I didn't hedge, I would have lost money. Period. Instead, I took a small part of what would have been my winnings and put it on the opposite side in case I lost. I lost the original bet but didn't lose penny #1.

You can certainly do what you want and as a matter of fact, as someone that's a big supporter of Jake D. and John Fox, I hope you do win. But don't ever let gamblers' greed take over for gamblers' smarts.

Sounds like good advice to me. Carolina is banged up anyway. If Carolina wins you get $4750. Hedge bet for Seattle in some way to get that down to $4K if Carolina wins and $750 if Seattle wins. You'll feel like an idiot if Carolina loses and you get nothing.

 

[boxers]

Smart gamblers hedge every time and don't look at the opportunities lost but rather the ones they took advantage of.

Vegas and sports books wish everyone followed your advice. There is a cost of hedging. Take the bets you like but hedging is a bad strategy over time. Each bet you make has a cost so bet the games you expect to win.

 

[GiantsRule]

Smart gamblers hedge every time and don't look at the opportunities lost but rather the ones they took advantage of.

Vegas and sports books wish everyone followed your advice. There is a cost of hedging. Take the bets you like but hedging is a bad strategy over time. Each bet you make has a cost so bet the games you expect to win.

Yeah, the cost of hedging is a guaranteed win. Let it ride and get all or nothing.

Risk a piece of your "winnings" and come out ahead regardless of the result.

Seems like an obvious decision to me. You hedge EVERY TIME if it means getting paid. (check the thread on the FFA board where someone said he had a Denver ticket to win the AFC and didn't see the value in hedging).

 

[GiantsRule]

Hopefully, yesterday showed you just why hedging is important and a valuable tool for the smart gambler.

--Bettor with high-paying AFC Champion Denver ticket? Got nothing, lost money on initial bet.

--Bettor with higher-paying NFC Champion Carolina ticket? Got nothing, lost money on initial bet.

Maybe it's easier to understand now that you have seen it put to the test twice today alone. Add in my small example from yesterday, and the picture's even clearer.

BTW: I'm not gloating in another's misery. I got my rear handed to me by investing a lot in Steve Smith with Over 102.5 receiving yards. He barely got the 2.5.

 

[kutta]

Hopefully, yesterday showed you just why hedging is important and a valuable tool for the smart gambler.

--Bettor with high-paying AFC Champion Denver ticket? Got nothing, lost money on initial bet.

--Bettor with higher-paying NFC Champion Carolina ticket? Got nothing, lost money on initial bet.

Maybe it's easier to understand now that you have seen it put to the test twice today alone. Add in my small example from yesterday, and the picture's even clearer.

BTW: I'm not gloating in another's misery. I got my rear handed to me by investing a lot in Steve Smith with Over 102.5 receiving yards. He barely got the 2.5.

So if Carolina had won would you say hedging was the wrong move?You can always pick individual instances and show what would have happened. But I'll take Carolina at 9.5 to 1 any day in that game. It didn't work out this time. Oh well.

I will still give myself a though.

 

[GiantsRule]

Hopefully, yesterday showed you just why hedging is important and a valuable tool for the smart gambler.

--Bettor with high-paying AFC Champion Denver ticket? Got nothing, lost money on initial bet.

--Bettor with higher-paying NFC Champion Carolina ticket? Got nothing, lost money on initial bet.

Maybe it's easier to understand now that you have seen it put to the test twice today alone. Add in my small example from yesterday, and the picture's even clearer.

BTW: I'm not gloating in another's misery. I got my rear handed to me by investing a lot in Steve Smith with Over 102.5 receiving yards. He barely got the 2.5.

So if Carolina had won would you say hedging was the wrong move?You can always pick individual instances and show what would have happened. But I'll take Carolina at 9.5 to 1 any day in that game. It didn't work out this time. Oh well.

I will still give myself a though.

Absolutely not. That's the price you pay for insurance. I noted before that you can't look at the "money you gave away by hedging". You need to look at it as an opportunity to guarantee yourself a profit. Yeah, if Carolina won, you gave away a piece of the profits, but you would have put yourself in the enviable position where you could have won money regardless.And I agree, taking Carolina at 9.5 to 1 was great betting and dare I say, a solid investment. But it's just foolish to let it all ride if you have a FOOLPROOF way to cash a ticket regardless of the outcome.

BTW, no need for the You had a lean towards the game and stuck to it. I just wanted to stress why I advocate hedging as strong as I do.

 

[MDSkinner]

Hopefully, yesterday showed you just why hedging is important and a valuable tool for the smart gambler.

--Bettor with high-paying AFC Champion Denver ticket? Got nothing, lost money on initial bet.

--Bettor with higher-paying NFC Champion Carolina ticket? Got nothing, lost money on initial bet.

Maybe it's easier to understand now that you have seen it put to the test twice today alone. Add in my small example from yesterday, and the picture's even clearer.

BTW: I'm not gloating in another's misery. I got my rear handed to me by investing a lot in Steve Smith with Over 102.5 receiving yards. He barely got the 2.5.

So if Carolina had won would you say hedging was the wrong move?You can always pick individual instances and show what would have happened. But I'll take Carolina at 9.5 to 1 any day in that game. It didn't work out this time. Oh well.

I will still give myself a though.

Absolutely not. That's the price you pay for insurance. I noted before that you can't look at the "money you gave away by hedging". You need to look at it as an opportunity to guarantee yourself a profit. Yeah, if Carolina won, you gave away a piece of the profits, but you would have put yourself in the enviable position where you could have won money regardless.And I agree, taking Carolina at 9.5 to 1 was great betting and dare I say, a solid investment. But it's just foolish to let it all ride if you have a FOOLPROOF way to cash a ticket regardless of the outcome.

BTW, no need for the You had a lean towards the game and stuck to it. I just wanted to stress why I advocate hedging as strong as I do.

I just want to say that I have never placed a bet on a game in my life, but this certainly convinces me that if I ever do, I will search for opportunities to hedge. I am all about the idea that "some guaranteed profit is better than no profit" even if it means risking extra profit.

 

[boxers]

didn't work out this time but if one always hedges to gaurantee a win, then they are destined to be a loser over time.Odds on parlay are worse then a straight bet to begin with and then you make it worse hedging.There's a reason people sell want to sell you insurance, extended warranties, etc. for everything.

 

[GiantsRule]

didn't work out this time but if one always hedges to gaurantee a win, then they are destined to be a loser over time.

Odds on parlay are worse then a straight bet to begin with and then you make it worse hedging.

There's a reason people sell want to sell you insurance, extended warranties, etc. for everything.

This makes zero sense! You only hedge when you have the opportunity to win guaranteed money. That means as part of the last part of a parlay or taking the opposite side on a future bet.Pay a little on the other side to win a little less money or break even or pay a little more on the other side and win money regardless if you win or lose.

If hedging makes sure you can NEVER lose, you can't possibly "be a loser over time". Honestly, I'm not sure you understand the basic concept of hedging.

 

[jeff_eaglz]

The argument against hedging, if I can simplify it, is that if you always plan on hedging, the house / casino will set the line with that "future hedge" bet in mind. That is, if you are getting Pittsburgh at 20-1 on January 4th to win SB XL, that assumes that if you get to February 4th and are still alive, then you will bet on the opponent to "hedge" and assure yourself of a victory.On the surface, I see that argument as valid. Digging underneath, it is clear that it is a bad argument.Today Pittsburgh is a favorite to win SB XL. As such, hedging a $100 wager on Pittsburgh to win at 20-1 placed weeks ago by betting Seattle to win, say $1000 on a $600 wager, makes perfect sense. (I don't know the historical lines or the money line off hand, but assume the example is close enough).TODAY you can "buy down" your initial Pittsburgh wager to 13-1, meaning you win $1400 if Pittsburgh wins (win $2000, lose $600) and you get $900 ($1000 vs $100 loss) if Seattle wins.So you change your bet from $100 to win $2000 to a guaranteed $900 or $1400. That is WAY better than you can get TODAY. So hedging a longshot ticket to a guaranteed win is the way to go. Vegas acknowledges it as much by saying that if you can get 13-1 on Pittsburgh to win, that's a no-brainer.

 

[BassNBrew]

didn't work out this time but if one always hedges to gaurantee a win, then they are destined to be a loser over time.

Odds on parlay are worse then a straight bet to begin with and then you make it worse hedging.

There's a reason people sell want to sell you insurance, extended warranties, etc. for everything.

Strongly disagree. Carolina was 9.5 to make the bowl. You couldn't have played the moneylines on Carolina and made that return. Occasionally there is some value in prop bets, especially with the lesser profile teams.

 

[GiantsRule]

didn't work out this time but if one always hedges to gaurantee a win, then they are destined to be a loser over time.

Odds on parlay are worse then a straight bet to begin with and then you make it worse hedging.

There's a reason people sell want to sell you insurance, extended warranties, etc. for everything.

Strongly disagree. Carolina was 9.5 to make the bowl. You couldn't have played the moneylines on Carolina and made that return. Occasionally there is some value in prop bets, especially with the lesser profile teams.

 

[boxers]

I agree there is value in some prop bets but if you hedge every time you get to the last game...it will be tough making money over the long-run.Hedge if you don't expect them to win the last game but not because it "gaurantees" that you make money.

 

[Perfect Tommy]

Sorry to dredge up an old thread, but this is important. Anybody who doesn't understand what Boxer and others are talking about here have no shot at success at any kind of gambling ever. Cut your losses now rather than trying to find the magic elixir of luck that transcends mathematics and allows a summation of negative numbers to come up positive. Hedging is a special strategy that suckers engage in religiously but professionals do only in very special cases.

I agree there is value in some prop bets but if you hedge every time you get to the last game...it will be tough making money over the long-run.

Hedge if you don't expect them to win the last game but not because it "gaurantees" that you make money.

 

[GiantsRule]

Sorry to dredge up an old thread, but this is important. Anybody who doesn't understand what Boxer and others are talking about here have no shot at success at any kind of gambling ever. Cut your losses now rather than trying to find the magic elixir of luck that transcends mathematics and allows a summation of negative numbers to come up positive. Hedging is a special strategy that suckers engage in religiously but professionals do only in very special cases.

I agree there is value in some prop bets but if you hedge every time you get to the last game...it will be tough making money over the long-run.

Hedge if you don't expect them to win the last game but not because it "gaurantees" that you make money.

Again, this makes absolutely no sense. I used to think the hardest thing to get message board participants to understand is when I needed to explain on the FF Today boards, ad nauseum, that there's no such thing as the cancellation theory in fantasy football.Now it seems I have to go the same route on this board as it relates to hedging.

I have had plenty of success in gambling throughout the years and I use hedging whenever I have the opportunity. Obviously, if I take a 3-teamer at the same time (all 1 p.m. games), there's no hedging opportunity. But if I take 3 teams with 2 at 1 p.m. and one at 4:15, you better believe I'm going for the guaranteed payoff at 4:15. It's the ONLY, let me repeat that, ONLY way to 100% get paid gambling.

Now if you can't understand that, then apparently, you don't understand some of the tricks of the trade necessary to turn a profit in sports gambling.

 

[AB in DC]

boxer/Tommy--I'm trying to understand what you're saying. Let me try to translate: If you're going to make a longshot bet expecting to hedge if you have the opportunity, then you should never have made that bet in the first place.In practical terms: If you bet 9.5 to 1 odds on Carolina in the SB at the beginning of the season expecting to hedge on the NFC Championship Game, then you shouldn't have made that bet but instead bet the xx to 1 odds on Carolina making the NFC Championship game only.Am I getting it?

 

[boxers]

I have had plenty of success in gambling throughout the years and I use hedging whenever I have the opportunity. Obviously, if I take a 3-teamer at the same time (all 1 p.m. games), there's no hedging opportunity. But if I take 3 teams with 2 at 1 p.m. and one at 4:15, you better believe I'm going for the guaranteed payoff at 4:15. It's the ONLY, let me repeat that, ONLY way to 100% get paid gambling.

Now if you can't understand that, then apparently, you don't understand some of the tricks of the trade necessary to turn a profit in sports gambling.

Most people who aren't very good at gambling, fantasy football, etc. try to find a way to justify how they have been successful. It's good to hear you've had success gambling. However, if you are frequently betting 3 game parlays and always hedging when you can gaurantee money, then the best bet over time will be investing with your bookie.

Just hoping others think through why this hedging strategy doesn't make sense. Do the the math to figure out why the strategy doesn't work rather than getting a thrill from winning bets that were hedged.

 

[boxers]

boxer/Tommy--

I'm trying to understand what you're saying. Let me try to translate: If you're going to make a longshot bet expecting to hedge if you have the opportunity, then you should never have made that bet in the first place.

In practical terms: If you bet 9.5 to 1 odds on Carolina in the SB at the beginning of the season expecting to hedge on the NFC Championship Game, then you shouldn't have made that bet but instead bet the xx to 1 odds on Carolina making the NFC Championship game only.

Am I getting it?

It depends on if you expect CAR to win the NFC championship game or not and what kind of money it would cost to hedge the bet. After they lose it's clear one should have hedged. Prop bets make more sense to hedge if the odds are right to hedge later. My point is hedging is for special situations, not just because you can gaurantee winning a bet.

However, hedging the late game on a 3 team parlay bet everytime that you can gaurantee being a winner is a bad strategy. In some cases hedging makes sense but you can't always hedge.

 

[GiantsRule]

boxer/Tommy--

I'm trying to understand what you're saying.  Let me try to translate: If you're going to make a longshot bet expecting to hedge if you have the opportunity, then you should never have made that bet in the first place.

In practical terms: If you bet 9.5 to 1 odds on Carolina in the SB at the beginning of the season expecting to hedge on the NFC Championship Game, then you shouldn't have made that bet but instead bet the xx to 1 odds on Carolina making the NFC Championship game only.

Am I getting it?

It depends on if you expect CAR to win the NFC championship game or not and what kind of money it would cost to hedge the bet. After they lose it's clear one should have hedged. Prop bets make more sense to hedge if the odds are right to hedge later. My point is hedging is for special situations, not just because you can gaurantee winning a bet.

However, hedging the late game on a 3 team parlay bet everytime that you can gaurantee being a winner is a bad strategy. In some cases hedging makes sense but you can't always hedge.

Obviously, you can't always hedge. But if you can and guarantee yourself a profit, what's so hard to understand? That's not a losing strategy in the slightest!

 

[jeff_eaglz]

boxer/Tommy--

I'm trying to understand what you're saying. Let me try to translate: If you're going to make a longshot bet expecting to hedge if you have the opportunity, then you should never have made that bet in the first place.

In practical terms: If you bet 9.5 to 1 odds on Carolina in the SB at the beginning of the season expecting to hedge on the NFC Championship Game, then you shouldn't have made that bet but instead bet the xx to 1 odds on Carolina making the NFC Championship game only.

Am I getting it?

It depends on if you expect CAR to win the NFC championship game or not and what kind of money it would cost to hedge the bet. After they lose it's clear one should have hedged. Prop bets make more sense to hedge if the odds are right to hedge later. My point is hedging is for special situations, not just because you can gaurantee winning a bet.

However, hedging the late game on a 3 team parlay bet everytime that you can gaurantee being a winner is a bad strategy. In some cases hedging makes sense but you can't always hedge.

Ok, I understand the argument now.Statistically speaking you're cutting your odds down to win a longer odd wager.

Let's see what the math would tell us:

Example:

3 team parlay at 6-1. That means you win $600 if you win, lose $100 if you, well, lose.

If you win the first 2/3 and have an opportunity to bet $350 against your 3rd team, yes you have won $250 either way:

Win the parlay = $600, but the other bet loses $350. Net up $250.

Lose the parlay = -$100, but you win the hedge bet for $350. Net up $250.

Why is this a bad idea? Let's try and figure it out.....

Example 1:Let's assume that the outcomes are 50/50 every time. So the chances of getting 3 right are 1 in 8, or 7-1. The parlay is 6-1, so you're going to lose more than you win over time if it is 50/50. To put it in $ terms, for every $600 parlay (1 win) you win, you should expect to lose 7 times (-$700). You lose $100 every 8 bets here.

Example 2:Now, go to the "hedge" philosophy. You win the first 2/3 25% of the time (50/50 x 2). So if you hedge to guarantee that you get less than 1/2 of the bet back, you are going to win a fraction of the original payoff 25% of the time and lose the other 75%.

Again in $$ terms:

75% of the time you wind up -$100.

25% of the time you win a portion of the parlay, or $250, as described above.

Betting 8 times (like in Example 1) you can expect to lose 75% of the time (6 times you lose $100) and the other two you hedge and win just $250.

Adding all that up and you get $250 x 2 - $100 x 6 = -$100.

From what I see - they're equal......

 

[Perfect Tommy]

You are on the right track. There are many possible reasons one might hedge, but to "guarantee a profit" is not one of them.

It might be that the bet on CAR to win the superbowl is so good that you can't pass it up. Then it might make sense to bet big and then hedge some back later on in order to lower your risk. But you must be aware that you are paying a premium to make that hedge bet. And the reason is certainly not to "guarantee a profit" but in order to lower your risk.

If you stop liking CAR and suddenly like SEA at that point, which can happen, then it also makes sense to make a large bet on SEA since you already have money on CAR.

There are other situations where hedging makes sense as well. It is all about the mathematics.

boxer/Tommy--

I'm trying to understand what you're saying. Let me try to translate: If you're going to make a longshot bet expecting to hedge if you have the opportunity, then you should never have made that bet in the first place.

In practical terms: If you bet 9.5 to 1 odds on Carolina in the SB at the beginning of the season expecting to hedge on the NFC Championship Game, then you shouldn't have made that bet but instead bet the xx to 1 odds on Carolina making the NFC Championship game only.

Am I getting it?

 

[Perfect Tommy]

This is exactly what I am talking about. The mathematics does not change just because you might feel that the mathematical solution is wrong. Craps players and lottery players try the feelings theory all the time, and casinos are built on people with that very theory losing money. Gambling is all about mathematics. If you believe that some of the tricks of the gambling trade involve thumbing your nose at mathematics and going the other way because if feels right to you, then you had best not gamble too much.

Again, this makes absolutely no sense. I used to think the hardest thing to get message board participants to understand is when I needed to explain on the FF Today boards, ad nauseum, that there's no such thing as the cancellation theory in fantasy football.

Now it seems I have to go the same route on this board as it relates to hedging.

I have had plenty of success in gambling throughout the years and I use hedging whenever I have the opportunity. Obviously, if I take a 3-teamer at the same time (all 1 p.m. games), there's no hedging opportunity. But if I take 3 teams with 2 at 1 p.m. and one at 4:15, you better believe I'm going for the guaranteed payoff at 4:15. It's the ONLY, let me repeat that, ONLY way to 100% get paid gambling.

Now if you can't understand that, then apparently, you don't understand some of the tricks of the trade necessary to turn a profit in sports gambling.

 

[Perfect Tommy]

You are almost there. There are two factors you are forgetting. First, presumably you have some reason to like the team you bet in the third leg of the parlay. If so, then that is where you want your money. The second point is that you must lay the juice to bet the hedge. If there were no juice, then hedging would be harmless (though certainly still not a winning strategy). With the juice, you are paying a substantial premium simply to NOT bet the third game. Heck, you could have done that for free!!

Ok, I understand the argument now.

Statistically speaking you're cutting your odds down to win a longer odd wager.

Let's see what the math would tell us:

Example:

3 team parlay at 6-1. That means you win $600 if you win, lose $100 if you, well, lose.

If you win the first 2/3 and have an opportunity to bet $350 against your 3rd team, yes you have won $250 either way:

Win the parlay = $600, but the other bet loses $350. Net up $250.

Lose the parlay = -$100, but you win the hedge bet for $350. Net up $250.

Why is this a bad idea? Let's try and figure it out.....

Example 1:Let's assume that the outcomes are 50/50 every time. So the chances of getting 3 right are 1 in 8, or 7-1. The parlay is 6-1, so you're going to lose more than you win over time if it is 50/50. To put it in $ terms, for every $600 parlay (1 win) you win, you should expect to lose 7 times (-$700). You lose $100 every 8 bets here.

Example 2:Now, go to the "hedge" philosophy. You win the first 2/3 25% of the time (50/50 x 2). So if you hedge to guarantee that you get less than 1/2 of the bet back, you are going to win a fraction of the original payoff 25% of the time and lose the other 75%.

Again in $$ terms:

75% of the time you wind up -$100.

25% of the time you win a portion of the parlay, or $250, as described above.

Betting 8 times (like in Example 1) you can expect to lose 75% of the time (6 times you lose $100) and the other two you hedge and win just $250.

Adding all that up and you get $250 x 2 - $100 x 6 = -$100.

From what I see - they're equal......

 

[AB in DC]

Since this is new to me, let me try a thought experiment here. Suppose that there's something like a stock market for bets, so that you can "buy" or "sell" shares of a past bet.You've put $100 down on Carolina to reach the Super Bowl at 9.5 to 1 odds. Essentially, you've bought a piece of paper that will pay you $1050 ($950 plus your $100 back) if Carolina is NFC Champion, $0 if not.January 16 comes around and Carolina is in the NFC Championship game. But they're an underdog -- since I don't know what the odds were, let's say they were 2 to 1 against beating Seattle. (Assume that the original bettor believes that the odds on this game are reasonable and wouldn't place a bet on either side in normal circumstances.)At 2:1, to earn that same $1050 on Carolina, you'd have to pay $350 (win $700 plus your $350 back). So your piece of paper is now "worth" $350.Now, in this case, you can hedge your original bet by selling a share of it. Let's say you sell 1/3 of your bet at a "price" of $345, collecting $115.Hedger says, "I've just guaranteed a profit. I'm up $15 and could still make $700 (2/3 * $1050) if Carolina wins."Perfect Tommy says, "Bad move, if that was the only reason you sold."The question is, why? If you buy a stock at $100 and it skyrockets to $350, then if all else equal, why shouldn't you sell high?

 

[Perfect Tommy]

This thought experiment is very realistic. A huge difference with sports betting and stocks is that the cost of transactions is typically much higher. Apart from that, it is a mistake in both stocks and sports. People have lost fortunes making this very error in stocks, in fact.

Consider the sequence of events. Buy a stock at 100. It goes to 350. Sell stock. Where did you make the money? Was it when you sold the stock? No, of course not. My grandmother could have done that. It was when the stock went up to 350. That was the tough part. But the "guaranteed profit" theory acts as though it was the act of selling at 350 that was the winning move. If you are a master of buying at 100 and selling at 350, you got nothing. If you master moving from 100 to 350, now you really got something.

When you own a stock, it doesn't matter what the stock price was when you bought it. It only matter what the price is now and whether you want to own it for that price or not. (Unless there are tax implications. I am not talking about that).

Since this is new to me, let me try a thought experiment here.

Suppose that there's something like a stock market for bets, so that you can "buy" or "sell" shares of a past bet.

You've put $100 down on Carolina to reach the Super Bowl at 9.5 to 1 odds. Essentially, you've bought a piece of paper that will pay you $1050 ($950 plus your $100 back) if Carolina is NFC Champion, $0 if not.

January 16 comes around and Carolina is in the NFC Championship game. But they're an underdog -- since I don't know what the odds were, let's say they were 2 to 1 against beating Seattle.

(Assume that the original bettor believes that the odds on this game are reasonable and wouldn't place a bet on either side in normal circumstances.)

At 2:1, to earn that same $1050 on Carolina, you'd have to pay $350 (win $700 plus your $350 back). So your piece of paper is now "worth" $350.

Now, in this case, you can hedge your original bet by selling a share of it. Let's say you sell 1/3 of your bet at a "price" of $345, collecting $115.



Hedger says, "I've just guaranteed a profit. I'm up $15 and could still make $700 (2/3 * $1050) if Carolina wins."

Perfect Tommy says, "Bad move, if that was the only reason you sold."

The question is, why? If you buy a stock at $100 and it skyrockets to $350, then if all else equal, why shouldn't you sell high?

 

[Gamblor]

didn't work out this time but if one always hedges to gaurantee a win, then they are destined to be a loser over time.

Odds on parlay are worse then a straight bet to begin with and then you make it worse hedging.

There's a reason people sell want to sell you insurance, extended warranties, etc. for everything.

Strongly disagree. Carolina was 9.5 to make the bowl. You couldn't have played the moneylines on Carolina and made that return. Occasionally there is some value in prop bets, especially with the lesser profile teams.

Not a good posting - this is wrong.Car was about +130 vs NYG, +130 vs Chi, +170 vs Sea. (this is estimating on the low side, there were better lines then this out there)

Bet $100. you have $230 after the first game, $530 after the second game, $1430 if they would have beat Sea. 40% more then taking the 9.5 to 1 at $100 and finishing with $1050. Granted these MLs are known in hindsight, but generally you get better value this way then you do with futures.

 

[Gamblor]

Care to describe how you hedged for those of us non-degerate types?

Placed a parlay (one bet on two games paying 13/5 (or 2.6 to 1) odds) on:Game 1: Over 45

Game 2: Over 43

Assume I bet $100. That's $100 to win $260.

The first part of the bet won easily. Since it went over early in the 4th quarter, I placed a bet on the opposite side of the 2nd game (Under 43) for the same amount as my initial wager ($110 paying $100).

That way, only three things could happen:

1. I win the parlay (+260) but lose some of the profit (-110) because I intentionally bet against myself as insurance in case I lost (WIN $150)

2. I lose the parlay (-100) but win the insurance bet (+100) and break even -- No harm, no foul

3. The 2nd game ends at exactly 43 points. The parlay gets pushed down to a straight wager (+91) and I get my money back for a push on the "hedge bet" (0). (WIN $91)

So the optimist will look at this scenario and say "why spend money to bet against yourself? You bet the money with the intention of winning the bet or losing. Now, if you win the bet, you take a lesser payoff".

The pessimist says "that would suck to win the first bet, get a step closer to cashing, only to end up with nothing at the end of the day. I'd sooner give back potential winnings knowing that if I lose the bet, I still don't lose any money."

Smart bettors ALWAYS follow the pessimist. It's smart money management.*

*--Although parlays are rarely ever smart.

boxer/Tommy--

I'm trying to understand what you're saying. Let me try to translate: If you're going to make a longshot bet expecting to hedge if you have the opportunity, then you should never have made that bet in the first place.

In practical terms: If you bet 9.5 to 1 odds on Carolina in the SB at the beginning of the season expecting to hedge on the NFC Championship Game, then you shouldn't have made that bet but instead bet the xx to 1 odds on Carolina making the NFC Championship game only.

Am I getting it?

It depends on if you expect CAR to win the NFC championship game or not and what kind of money it would cost to hedge the bet. After they lose it's clear one should have hedged. Prop bets make more sense to hedge if the odds are right to hedge later. My point is hedging is for special situations, not just because you can gaurantee winning a bet.

However, hedging the late game on a 3 team parlay bet everytime that you can gaurantee being a winner is a bad strategy. In some cases hedging makes sense but you can't always hedge.

Obviously, you can't always hedge. But if you can and guarantee yourself a profit, what's so hard to understand? That's not a losing strategy in the slightest!

Yes it is.Im sorry GiantsRule, but you are giving terrible advice in this thread. Jeff already went over this, but I feel a duty to reiterate in hopes that others dont blindly follow your suggestions.

My first piece of advice is not to bet on parlays, although this is advice I dont follow myself.

It is a losing strategy if you plan to hedge everytime you bet on a parlay. Sure - a hedge is a good play sometimes, but to suggest that you should always hedge to ensure you breakeven with a parlay as you've indicated, you will lose in the long run.

Lets take your 2 team parlay in your example. 4 possible outcomes (for the sake of this example we will assume no pushes).

1. Team A wins, Team B wins

2. Team A wins, Team B loses

3. Team A loses, Team A wins

4. Teams A loses, Team B loses

Each outcome has a 25% chance of occuring.

Assume you bet $100 to win $260 as you suggested and plan to hedge by betting your $110 on team B losing if Team A wins..

1. You win $260 and lose $110 = $150

2. You lose $100 (parlay bet) but win $100 = $0

3. You lose $100

4. You lose $100

So your expected profit on this bet in the long run by hedging is .25($150)+.25(0)+.25(-100)+.25(-100) = -$12.50

Now assume you dont hedge.

bet $100 to win $260 as you suggested.

1. You win $260

2. You lose $100

3. You lose $100

4. You lose $100

So your expected profit on this bet in the long run by hedging is .25($260)+.25(-100)+.25(-100)+.25(-100) = -$10



Now assume you take your $100 and bet it on the two teams straight up ($50 each).

$50 to win $45 on each game. This is assuming you play -110 on each game. Still the same 4 possible outcomes.

Results

1. You win $91

2. You lose $4.50

3. You lose $4.50

4. You lose $100

So your expected profit on this bet in the long run by betting straight up is .25($91)+.25(-4.5)+.25(-4.5)+.25(-100) = -$4.75

All losing bets in the long run, everything else being equal. But your expected value is highest with straight up bets, then with parlays, and the worst expected value is the parlay with the intention of hedging.

 

[GiantsRule]

I was never suggesting hedging at every opportunity. Only when it makes sense and you can guarantee yourself a profit. I'm sorry, but the Carolina future is the perfect example. 9.5 to 1 odds that you could have taken a lesser payoff on (say 4 to 1 odds) to ensure yourself a profit whether the Panthers pull it off or not. Same with the guy with the large odds on the Broncos to win the AFC who decided it "wasn't worth hedging".Yeah, two teamers, that's a hard case to make. You really have to be second guessing yourself (as I was last Saturday) to buy back a bet at 2.6 to 1 odds. But when it's the last leg of a 3-teamer, or a longshot future? There's no harm to it. My feeling is, if you're riding a longshot bet through the various highs and lows of gambling (like a future bet, or a multi-leg parlay) and you get to the final game you need to cash the ticket, it makes perfect sense to put a few bucks on the other side to either make it a non-risk investment or a guaranteed profit. You can spin all the algorithms you want about percentages and probabilities. I've been in this situation numerous times and it's always put money in my pocket when I get this far. Sometimes the original bet wins and I "threw money away on insurance". Other times, the bet loses and I still got my consolation prize. There's no theory involved!In simplest terms:I have a $100 ticket on the Steelers at 6:1 odds to win the Super Bowl. If they win, I pocket $600. If I lose, I get nothing. Squat. Zero. Thanks for playing. Let me know when they hand out second prize money for making it this far.I can shave two points off those odds and take the Steelers at 4:1 and use those points (or $200) on Seattle at about 2:1 odds. Then, if the Steelers still win, I pocket $400 profit. If the Seahawks pull the upset, I still make $400. So instead of going for $600 or nothing, I'm in a no-lose situation: win $400 either way and call it a day.Does every bet work like this? No. If I had the Seahawks, I'd have to compensate more on the Steelers since they are the favorites. If the Steelers ticket paid even less odds, it probably wouldn't make sense to do it. I think this thread spun out of control because people thought I was saying to always hedge. Sometimes, you don't even have the opportunity to do so (props are the best example).

 

[Gamblor]

I think this thread spun out of control because people thought I was saying to always hedge. Sometimes, you don't even have the opportunity to do so (props are the best example).

Not trying to bust your balls, and I do agree Kutta should have hedged and generally with futures I would hedge also. I only used the 2 team example as that is the one you used, but the same numbers would apply if you break down other multi game parlays. And if you really dont know why we think you were saying to always hedge please reread your posts.

 

[GiantsRule]

I think this thread spun out of control because people thought I was saying to always hedge. Sometimes, you don't even have the opportunity to do so (props are the best example).

Not trying to bust your balls, and I do agree Kutta should have hedged and generally with futures I would hedge also. I only used the 2 team example as that is the one you used, but the same numbers would apply if you break down other multi game parlays. And if you really dont know why we think you were saying to always hedge please reread your posts.

I did. I think what you and the other "anti-hedge advocates" are overlooking is that the chances of even getting to the brink of cashing a long odds future ticket or multi-team parlay are very slim. As much as I talk about hedging, most of the time, you won't even have the opportunity as you'll slip up early and never get that far.I think a lot of the math a lot of you are using to debunk me assumes that it's easy to win futures and parlays. Part of that is my fault since I didn't note it early on. But I was trying to explain to a few bettors that had those longshot tickets to not assume they were heading to the pay window just because things "looked good".

Again, I do agree with you. Hedging a 2-team parlay isn't a good idea and is pretty much worthless. That was an instance of my own paranoia that happened to save me a few bucks (bucks I ended up giving back in a virtual bloodbath less than 24 hours later anyway!)

 

[Perfect Tommy]

And here is my point in the purest form. If you don't think that percentages and probabilities are relevant in gambling, you had best not gamble. There is no doubt you can win by first winning part of your bet and then hedging. The problem is that you had to win part of your bet first. You ignore the mathematics and are going by feel. It feels good to lock up a win. And if that is worth something to you, then by all means spend money to achieve that good feeling. But it is important for people to understand that you are indeed spending money for the privelage of having that good feeling. It reminds me of Steve Martin's technique for making a million dollars and paying no taxes. "First, make a million dollars ..."

I.

You can spin all the algorithms you want about percentages and probabilities. I've been in this situation numerous times and it's always put money in my pocket when I get this far. Sometimes the original bet wins and I "threw money away on insurance". Other times, the bet loses and I still got my consolation prize. There's no theory involved!

 

[GiantsRule]

And here is my point in the purest form. If you don't think that percentages and probabilities are relevant in gambling, you had best not gamble. There is no doubt you can win by first winning part of your bet and then hedging. The problem is that you had to win part of your bet first. You ignore the mathematics and are going by feel. It feels good to lock up a win. And if that is worth something to you, then by all means spend money to achieve that good feeling. But it is important for people to understand that you are indeed spending money for the privelage of having that good feeling. It reminds me of Steve Martin's technique for making a million dollars and paying no taxes. "First, make a million dollars ..."

You know, you could have summed everything up a lot easier if you simply said: "Parlays and futures are horrible bets."I mentioned that in one of the first few posts in this thread!

 

[Perfect Tommy]

I don't believe that parlays and futures are horrible bets. They are sometimes great bets. That isn't what I am saying at all. Others have said so, and I didn't bother to respond. But I have seen many cases where either kind of bet is excellent.

And here is my point in the purest form.  If you don't think that percentages and probabilities are relevant in gambling, you had best not gamble.  There is no doubt you can win by first winning part of your bet and then hedging.  The problem is that you had to win part of your bet first.  You ignore the mathematics and are going by feel.  It feels good to lock up a win.  And if that is worth something to you, then by all means spend money to achieve that good feeling.  But it is important for people to understand that you are indeed spending money for the privelage of having that good feeling.  It reminds me of Steve Martin's technique for making a million dollars and paying no taxes.  "First, make a million dollars ..."

You know, you could have summed everything up a lot easier if you simply said: "Parlays and futures are horrible bets."I mentioned that in one of the first few posts in this thread!

 

[AB in DC]

This thought experiment is very realistic. A huge difference with sports betting and stocks is that the cost of transactions is typically much higher. Apart from that, it is a mistake in both stocks and sports. People have lost fortunes making this very error in stocks, in fact.

Consider the sequence of events. Buy a stock at 100. It goes to 350. Sell stock. Where did you make the money? Was it when you sold the stock? No, of course not. My grandmother could have done that. It was when the stock went up to 350. That was the tough part. But the "guaranteed profit" theory acts as though it was the act of selling at 350 that was the winning move. If you are a master of buying at 100 and selling at 350, you got nothing. If you master moving from 100 to 350, now you really got something.

When you own a stock, it doesn't matter what the stock price was when you bought it. It only matter what the price is now and whether you want to own it for that price or not. (Unless there are tax implications. I am not talking about that).

The problem with this logic is that your "stock" doesn't do anything for you until you cash in. It's like an unrealized capital gain, or a stock option. Looks nice on paper, but it can't help you until you pull the trigger.In my hypothetical, the hedger felt that the odds on Sea-Car were reasonable, so the $350 "stock" was neither undervalued nor overvalued. So you're saying that the transaction cost is the only reason not to sell? Apologies for the economic jargon, but if your utility curve is concave, that alone could making selling the right move. All else equal, you're better off (in the utility sense) with $350 than a one-third probability of $1050. Depending on the transaction cost and the concavity, you could be better off with even less than $350.

Of course, if you're a high-volume bettor, then your utility curve will be very flat, so the pure probability calculation will apply and almost any transaction cost would be prohibitive. But for the Average Joe who only makes a handful of bets every year, it could still be the right move.

 

[AB in DC]

I've been in this situation numerous times and it's always put money in my pocket when I get this far.

Of course you will win money when you get this far. The question is whether you could have won more money in these cases. How much would you have won if you hadn't hedged? (You'd have fewer wins -- as you say, there's no second prize -- but larger payouts.) Or, if you're hedging the last game of a three-team parlay, how much would you have won if you'd only bet a two-team parlay on the early games?

 

[Perfect Tommy]

A couple of problems.

1st, it is a classic mistake to believe that the equity gained when the stock goes up isn't a real gain. Since you have the option to cash out, it is a real gain. If you choose not to cash out, then you are continuing to gamble. But that does not make the equity you have gained in any way less tangible. In the same way, when CAR reached the NFC Championship game, the future bet on them to get to the superbowl had a real, tangible gain if value. It is this same error that leads people to refuse to sell a stock after it has gone down. They mistakenly believe that the losses are not real or tangible until they actually sell the stock.

2nd. You never said in your example that the hedge price is now considered by you to be the fair price. If that is the case, then hedging is fine and I never said otherwise. However, to make the initial bet intending to hedge out later when the cost of hedging is very high, and to say math is mumbo jumbo is a sure way to lose in the long run. The cost if making any one hedge is only the cost of that one extra transaction. But to poopoo the cost of transactions (vig) in sports betting is really to miss the entire point of the game.

3rd, of course it is better not to gamble if you have no advantage. I never said otherwise. Don't know where you got that. Most people should be making sports bets small enough that their utility curve is very flat. If you somehow find yourself in a position where the utility curve is not flat, it could very well make sense to trade in some equity in order to lower risk. But that is not what this whole thread is about. It is about whether you should hedge in order to "guarantee a win". You have not made any point to support that claim. You have only nitpicked points that were already well understood but there was no need to mention. I and others have already mentioned that there are times when it is correct to hedge. We just didn't go into when those times are because it is has nothing to do with the conversation.

By the way, high volume bettors don't have flatter utility curves. That has to do with how much a marginal dollar is worth to you if you win, and how much it is worth if you lose. If you make only one bet a year, it is still the same calculation as if you make 1000 bets a year.

This thought experiment is very realistic.  A huge difference with sports betting and stocks is that the cost of transactions is typically much higher.  Apart from that, it is a mistake in both stocks and sports.  People have lost fortunes making this very error in stocks, in fact. 

Consider the sequence of events.  Buy a stock at 100.  It goes to 350.  Sell stock.  Where did you make the money?  Was it when you sold the stock?  No, of course not.  My grandmother could have done that.  It was when the stock went up to 350.  That was the tough part.  But the "guaranteed profit" theory acts as though it was the act of selling at 350 that was the winning move.  If you are a master of buying at 100 and selling at 350, you got nothing.  If you master moving from 100 to 350, now you really got something. 

When you own a stock, it doesn't matter what the stock price was when you bought it.  It only matter what the price is now and whether you want to own it for that price or not. (Unless there are tax implications.  I am not talking about that).

The problem with this logic is that your "stock" doesn't do anything for you until you cash in. It's like an unrealized capital gain, or a stock option. Looks nice on paper, but it can't help you until you pull the trigger.In my hypothetical, the hedger felt that the odds on Sea-Car were reasonable, so the $350 "stock" was neither undervalued nor overvalued. So you're saying that the transaction cost is the only reason not to sell? Apologies for the economic jargon, but if your utility curve is concave, that alone could making selling the right move. All else equal, you're better off (in the utility sense) with $350 than a one-third probability of $1050. Depending on the transaction cost and the concavity, you could be better off with even less than $350.

Of course, if you're a high-volume bettor, then your utility curve will be very flat, so the pure probability calculation will apply and almost any transaction cost would be prohibitive. But for the Average Joe who only makes a handful of bets every year, it could still be the right move.

 

[GiantsRule]

It is about whether you should hedge in order to "guarantee a win".  You have not made any point to support that claim. 

No offense, but I have defended this claim relentlessly. I'm a firm believer in hedging if it gets you a guaranteed win, i.e., taking lesser odds on one side to apply to the other side to get your initial bet back and/or a profit on either outcome.

 

[AB in DC]

1st, it is a classic mistake to believe that the equity gained when the stock goes up isn't a real gain. Since you have the option to cash out, it is a real gain. If you choose not to cash out, then you are continuing to gamble. But that does not make the equity you have gained in any way less tangible. In the same way, when CAR reached the NFC Championship game, the future bet on them to get to the superbowl had a real, tangible gain if value. It is this same error that leads people to refuse to sell a stock after it has gone down. They mistakenly believe that the losses are not real or tangible until they actually sell the stock.

I don't think I disputed this. We're arguing semantics here -- yes, it's a real gain in value, but unless you sell, its value is on paper only.

2nd. You never said in your example that the hedge price is now considered by you to be the fair price. If that is the case, then hedging is fine and I never said otherwise.

I said that the bettor felt the Sea-Car odds were reasonable -- in other words, that there is no perceived advantage in a vacuum. Isn't that the same thing, or am I missing something?

However, to make the initial bet intending to hedge out later when the cost of hedging is very high, and to say math is mumbo jumbo is a sure way to lose in the long run.

No argument from me.

The cost if making any one hedge is only the cost of that one extra transaction.

Sounds like this is the heart of the matter. I thought you were trying to say something more complex -- as I said, this is all new to me -- but this is a nice way to put it.

But to poopoo the cost of transactions (vig) in sports betting is really to miss the entire point of the game.

No argument from me.

3rd, of course it is better not to gamble if you have no advantage. I never said otherwise. Don't know where you got that.

I don't think I implied that you did. But in the context of a hedge, my instinct is that the rationale changes. Of course, my instinct isn't very good, which is why I'm trying to understand your argument. Are you saying that the existence of the earlier bet should not affect the decision on whether to make that hedge bet? I believe you said earlier that it makes sense to hedge as a risk-minimization strategy. I just don't get how that's different than what I'm saying.

Most people should be making sports bets small enough that their utility curve is very flat.

Fair enough.

If you somehow find yourself in a position where the utility curve is not flat, it could very well make sense to trade in some equity in order to lower risk. But that is not what this whole thread is about. It is about whether you should hedge in order to "guarantee a win". You have not made any point to support that claim. You have only nitpicked points that were already well understood but there was no need to mention. I and others have already mentioned that there are times when it is correct to hedge. We just didn't go into when those times are because it is has nothing to do with the conversation.

I'm not trying to nitpick, nor am I trying to defend the "guarantee" claim. I'm trying to understand what you're saying, and if you don't think that this is appropriate for this particular thread, I'd be happy to start a new one.

By the way, high volume bettors don't have flatter utility curves. That has to do with how much a marginal dollar is worth to you if you win, and how much it is worth if you lose. If you make only one bet a year, it is still the same calculation as if you make 1000 bets a year.

Exactly -- but look at it the other way. If person A makes 1000 bets per year, and person B makes 1 bet per year, then all else being equal, that seems like pretty strong evidence that person A has a flatter utility curve. Or that the act of betting itself is of higher utility. Either way, not worth arguing about.

 

[Perfect Tommy]

Yes, you have made many points in regard to this. Your quote of mine was made in a response to another poster who did not make any point.

It is about whether you should hedge in order to "guarantee a win".  You have not made any point to support that claim. 

No offense, but I have defended this claim relentlessly. I'm a firm believer in hedging if it gets you a guaranteed win, i.e., taking lesser odds on one side to apply to the other side to get your initial bet back and/or a profit on either outcome.