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To hedge or not to hedge, here is the math and why hedging is a bad idea....

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Posted: #276
  Open-Cison for your honesty
 
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Posted: #277
Thanks Vanzack. For a 2 team A/R, the possible outcomes for a $100 bet would be:
 
Team A win, Team B loss: -$120
Team A loss, Team B win: -$120
Team A loss, Team B loss: -$240
Team A win, Team B win: +$400
 
One of my friends always gets tempted by the big payout and does a bunch of A/Rs throughout the season (and ends up losing). I wanna be able to give him a logical explanation on why it might not be such a good idea.
 
 
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Posted: #278
If you constantly play parlays, it would seem logical to let everything ride and the averages in the long run (if you don't consistently lose 50-50 last legs) to let it ride. But if you only parlay once in a while or rarely, it would seem logical to take the guaranteed money if it is a large enough amount, relative to each individual, that is. I understand vanzack's point about how not hedging would mathematically be beneficial in a constant LONG TERM style of wagering using parlays but other factors not limited to frequency of parlays played, game factors and changes, relative amount of winnings, etc need to be reviewed as well.
 
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Posted: #279
Koaj, in no way do I think you are a moron.  I do think that you are unintentionally inconsistent in your practice though.  I do know you are a value bettor, and a grinder, and that is the polar opposite of playing by "feel" when it comes to guaranteeing yourself money.  No problems - I am just trying to nudge you in to actually inspecting just how much you are giving away when you do this. 
 
Devilfan - you on the other hand are hopeless.  You refuse to even recognize that you are fighting math and your examples are all based on utility.  Take my example of the football game and make it a 100K bet instead of a 100 bet.  Now would you take 10K to cancel the bet?  50K?  70K??  The truth is that you are taking less than it is worth no matter what.  But you will tell me some emotional story of how you are a good gambler and dont tell you how to bet... blah blah blah....  but you refuse to inspect the math.  And I thought attorneys were trained to be rational critical thinkers.
 
Gam
 
Dmmx3 - thanks for the comments.  I havent read that book but I will check it out.  THanks for the tip. 
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Posted: #280
Last post:
 
Why would you construct a 4 team parlay if you end up hedging to secure a 3 teamer? If your not going to see it to the end:
 
Wager on a 3 teamer instead of a 4 teamer.
 
AM I the only one who sees this!
 
 
 
 
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Posted: #281
Quote Originally Posted by maddencurse:

Thanks Vanzack. For a 2 team A/R, the possible outcomes for a $100 bet would be:
 
Team A win, Team B loss: -$120
Team A loss, Team B win: -$120
Team A loss, Team B loss: -$240
Team A win, Team B win: +$400
 
One of my friends always gets tempted by the big payout and does a bunch of A/Rs throughout the season (and ends up losing). I wanna be able to give him a logical explanation on why it might not be such a good idea.
 

Its actually very simple.

Each of those outcomes has a 1 in 4 chance of hitting, or 25% for each one (assuming it is a non correllated parlay).

So if you played that A/R 4 different times, you could expect each outcome to happen once.  So your EV is really just a sum of the amounts you list above:

-120 -120 -240 +400 =  -80

So for every 100 dollar bet, you have a negative expectation of 20.  In other words, every time he makes this bet, he can expect to lose 20% of his initial investment.  Every 5 times he makes a 100 dollar bet, his cumulative EV is to be down 100 bucks, that means that it only takes 5 equal bets to lose your original stake.  Thats a pretty bad EV.

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Posted: #282
Quote Originally Posted by lbcake:

Last post:
 
Why would you construct a 4 team parlay if you end up hedging to secure a 3 teamer? If your not going to see it to the end:
 
Wager on a 3 teamer instead of a 4 teamer.
 
AM I the only one who sees this!
 
 
 

should have read :secure an amount that is less than a 3 team payout

 
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Posted: #283

IBcake - you are not the only one who sees that - but you are one of the few who undestands that.

 

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Posted: #284

IBcake - you are not the only one who sees that - but you are one of the few who undestands that.

 

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Posted: #285
Koaj, in no way do I think you are a moron.  I do think that you are unintentionally inconsistent in your practice though.  I do know you are a value bettor, and a grinder, and that is the polar opposite of playing by "feel" when it comes to guaranteeing yourself money.  No problems - I am just trying to nudge you in to actually inspecting just how much you are giving away when you do this.

-you know what's funny, i havent been in this spot since UCONN beat GT in the NCAA finals. i had UCONN at 8-1 to win the whole thing...favored by 8 i think over GT in the final and i took a little GT money line to cover my future outlay even though i knew there was no chance GT would win (but...could have been 85 all over again)

-i know i am leaving money on the table...very tough for me to gamble on the unknown vs taking the known, regardless of probability


 
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Posted: #286

makes sense. awesome explanation. no wonder he got killed last year doing all those. thanks vanzack

 
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Posted: #287
Vanzack --

I dont know if you recall, but we worked a lot on soccer (european mostly) in 2002. I knew (and still know) nothing about soccer, but was using a system that was returning nearly 1.2 units per every unit wagered (which is akin to hitting about 65% or so on a "normal" side or total at -107).

Anyway, I did well, and have taken a few years off, but am looking to tinker with the system and get it up and running again for this year.

Are you still investing in soccer? I looked thru the soccer forum but did not see your name in any of the recent posts.

Let me know. Good Luck to you.


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Posted: #288
The original post should be applauded for pointing out the irrefutable logic of hedging in the given instance.  But more importantly this thread should fall under "know your audience".  For the following is also irrefutable:

- gambling is illogical, if not for the sole reason that unless done outside the U.S. or in Nevada it is 100% illegal

- parlays are illogical: no sportbook will ever offer true payout odds

So will people continue to parlay and hedge, I would bet on it.
 
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Posted: #289
i understand the part about hedging being a bad idea mathematically you are just giving the giving the juice back again saying the line or juice hasnt changed since the original parlay. You are getting "double juiced." if on a last game of a parlay and you have ML one way and the other way the ML moves dramatically towards the side you are against it may be advantageous to Hedge as the juice has been made up.
Anyway
my question to Vanzack is in the orginal post "

The first situation is what the poster yesterday did, as he parlayed teams on 2 different days.  His first 3 teams were on Sunday, and his 4th team was on Monday.  This is a big no no.  He would be much better off betting a 3 team parlay on Sunday, and then rolling all of the proceeds in to a straight bet on Monday:

 

Option 1:  Bet a 4 team parlay at 10-1.  Bet 100, win 1,000.

Option 2:  Bet a 3 team parlay at 6-1, bet all proceeds straight up on Monday team.  Bet 100, win 1,336."

 

that doesnt make any sense to me i understand hedging is still mathematically wrong but what is wrong with betting the 4 game parlay that have games on different days. The pay out on a 3 game parlay that hits and all money is doubled up on the 4th game is the same as a 4 game parlay. If some also thinks that they are getting the best line or ML early this would be to thier advantage to bet then. If they believe the line (or juice on line) or ML will move to thier advantage later yes it would make sense to wait, but mathematically there isnt a difference between

a 4 game parlay with and a 3 game parlay doubled up.

juice of 9 percent

1.91^4=13.3

1.91^3 * 1.91=13.3

 

or simpler even money

2^4=16

2^3 * 2=16

 

either way on even ml bets 16 times wager

 
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Posted: #290
Nickcook80 - you make one fatal flaw in your argument.
 
You are dealing with a REAL TRUE ODDS PARLAY.  As you state, if it is a real true odds parlay, you are at no disadvantage by betting the parlay on games at different times.
 
Now lets fast forward to reality.  Where do you think you can bet a 4 team football parlay at 13.3-1?  The reason that parlays are a bad bet to begin with is because you pay extra inherent juice.  A 4 team parlay is not 13.3-1, a 4 team parlay usually pays 10-1.  And a 3 team parlay pays 6-1.
 
So while your argument is true and factual, reality is that you cannot find that bet in the real world. 
 
So using real world situations, you should never bet a parlay that the games dont start at the same time unless the money you are giving away in the odds is overpowered by the advantage of a line you know will move or something else.  Which is incredibly rare.
 
Bottom line, you get paid more to bet a 3 team parlay and roll the proceeds on to the 4th game - than betting a 4 team parlay.
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Posted: #291
Dmmx3 - I do bet soccer, but dont post my plays.
 
Reason?  Betting soccer is different than any other sport in that it has a lot of different ways to bet it.  Often I used to post a play that would be something like "Everton -ev -.5" - asian handicap that splits your bet half on ev and half on -.5.  Inevitably, other people would bet it a different way, giving more goals, or less goals, or on the ML, and not understand why they lost or won and get pissed.
 
It just ended up not being worth it to post because it wasnt doing anything for anyone, and I got frustrated with the lack of understanding.  But I do bet EPL, international soccer, and la liga, serie A, and the bundesliga every week.
 
Its very impressive that you have something winning at that rate.  If you choose to post about it in soccer forum I will take a look at it and discuss, if not I understand, but this thread is taking about an hour to load and Im pretty sure this thread is about to blow up the server.
 
GL
 
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Posted: #292
OpenCison-- it's falling on deaf ears...I have said exactly what you are saying a few times now... these guys would rather let it roll and lose 5 parlays in a row then and pay out 5 times in a row than lock in guaranteed $ each time... let them continue to do that and enjoy paying out each time....
 
Wow DevilFan you really dont get it....
 
Simply now....these guys would rather HAVE ALREADY CASHED A THREE TEAM PARLAY every time you are in a position to hedge your almost won 4 teamer.  READ THAT AGAIN.  Every time you are locking in guaranteed money with your hedge, the point is you would have made more money with a smaller parlay that would have already cashed.  EVERY SINGLE FREAKING TIME YOU ARE TALKING ABOUT LOCKING IN MONEY, THE PEOPLE YOU ARE ARGUING WITH WOULD HAVE ALREADY LOCKED IN MORE!!!!  Its not about whether or not to hedge, its about whether or not to have those extra legs.  You should never be in a position to hedge parlays because you shouldnt have legs that start later.  Even if you like that game you are better off rolling the winning parlay into a straight bet instead of having the book automatically roll your 3 teamer into a 4 teamer at worse odds.  Now you are going to say I dont want to roll the money into the next leg I want to lock in money...that is the dumbest shit ever...a parlay is automatically rolling each winner into the other...and if the times are staggered (i.e. a potentially hedgable parlay) then the whole point is every time you place a parlay with a game with a later start time, you are telling the books to roll you winnings of hitting the first legs if that happens into the late game.  Why not just leave the leg off...you do not want to be in positions to hedge parlays.  Every time you are in a position to hedge, realize that you would be in a better position with a parlay just including the winning legs already...and then you can bet the game straight if you want, risk less to make the same total amount you would have made on the initial 4-teamer.
 
You want to win a grand on a 4 teamer with a monday leg:
 
100-1000
 
Do 100-600 on the first 3 legs...if that hits then risk 440/400 on the mnf game. 

Now your are either +160 or +1000
But you would rather hedge a 4 teamer -100 for +1000

You are saying you would rather place a 100 4 team with hopes of being in a situation to hedge like in the latter option above, and are laughing at those who you think are scoffing at guaranteed money when you are missing the whole freaking point is that when you are thinking about hedging that last leg of your parlay, the ones who played it smart have already guaranteed their money by WINNING THE FREAKING 3 teamer.  Thats what keeps getting missed here...everyone talking guaranteed money.  Every time you find yourself in the position to guarantee money by hedging a parlay, you would have guaranteed yourself more by just leaving that later starting game/leg of the parlay in the first place.....WHAT IS THERE NOT TO GET ABOUT THIS?
 
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Posted: #293
          
          
    
          
          
 
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Posted: #294
Whatever DevilFan
 
You would rather lock in 450 by hedging a 100-1000 parlay than lock in 600 by just winning a three teamer every time you are in position to hedge the 4 teamer. 
 
Would you want to own a 500 to win 5000 4 team parlay that you can hedge if the first 3 legs hit?

Or would you rather just lock in 3000 on a winning 3 teamer every time you get a chance to hedge the final leg of a 4 teamer?
 
You keep choosing the first choice....to each his own
 
 
 
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Posted: #295
LB-
 
He won't acknowledge....
Attorney privilege.
 
 
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Posted: #296
Van is 100% correct. If you can't resist the temptation to hedge out of that final late game, then you're throwing away money by adding it to the parlay. There's no argument that can be made against this.
 
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Posted: #297

i never knew that they took an extra juice. I guess bodog doesnt as i just programed this parlay in and it gave real odds

 
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Posted: #298
For anyone not wanting to read the entire thread, here was the gist of it:
 
 
Vanzack:  Do you understand that 2+2 = 4, DevilFan?
DevilFan:  I'm all about locking in a profit.  That's all I care about.
Vanzack:  I understand that, but you can't argue the math, 2+2 = 4.  Will you at least acknowledge that?!
DevilFan:  I'm 31, I gamble thousands of dollars every night, I have a wife and kid.
Vanzack:  That's great, I'm happy for you, but you do realize 2+2 = 4, right?  At least admit that much!
DevilFan:  I'm a lawyer, I've been gambling for many years, tomorrow is my wife's birthday.
Vanzack:  Again, that's wonderful, I'm not sure what that has to do with math, but congratulations.  Now, for the last time, do you admit that 2+2 = 4?!  Answer the god damn question already!!
DevilFan:  Listen, I'm a husband and father, last week I wagered over $16,000 on an afternoon of football.  I know what I'm doing here, I've been doing it for 15 years.  Plus, I don't think I've mentioned this, my daughter is having a birthday in a couple of months.
Vanzack:  I give up, you're a moron.
DevilFan:  I own my own house, and tomorrow I have to take the dog to the vet.
Vanzack:  I'm done with you, your stupidity only surpasses your inability to understand math.
DevilFan:  Tomorrow is my anniversary, it's going to be 10 years for my wife and I, I'm a lawyer and I have a kid and german shepherd.
 
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Posted: #299
Quote Originally Posted by The Giant:

For anyone not wanting to read the entire thread, here was the gist of it:
 
 
Vanzack:  Do you understand that 2+2 = 4, DevilFan?
DevilFan:  I'm all about locking in a profit.  That's all I care about.
Vanzack:  I understand that, but you can't argue the math, 2+2 = 4.  Will you at least acknowledge that?!
DevilFan:  I'm 31, I gamble thousands of dollars every night, I have a wife and kid.
Vanzack:  That's great, I'm happy for you, but you do realize 2+2 = 4, right?  At least admit that much!
DevilFan:  I'm a lawyer, I've been gambling for many years, tomorrow is my wife's birthday.
Vanzack:  Again, that's wonderful, I'm not sure what that has to do with math, but congratulations.  Now, for the last time, do you admit that 2+2 = 4?!  Answer the god damn question already!!
DevilFan:  Listen, I'm a husband and father, last week I wagered over $16,000 on an afternoon of football.  I know what I'm doing here, I've been doing it for 15 years.  Plus, I don't think I've mentioned this, my daughter is having a birthday in a couple of months.
Vanzack:  I give up, you're a moron.
DevilFan:  I own my own house, and tomorrow I have to take the dog to the vet.
Vanzack:  I'm done with you, your stupidity only surpasses your inability to understand math.
DevilFan:  Tomorrow is my anniversary, it's going to be 10 years for my wife and I, I'm a lawyer and I have a kid and german shepherd.

BACK PATTING and KISSING threads are like passing HAM SANDWICHES around over and over-wall
 
 
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Posted: #300
Quote Originally Posted by The Giant:

For anyone not wanting to read the entire thread, here was the gist of it:
 
 
Vanzack:  Do you understand that 2+2 = 4, DevilFan?
DevilFan:  I'm all about locking in a profit.  That's all I care about.
Vanzack:  I understand that, but you can't argue the math, 2+2 = 4.  Will you at least acknowledge that?!
DevilFan:  I'm 31, I gamble thousands of dollars every night, I have a wife and kid.
Vanzack:  That's great, I'm happy for you, but you do realize 2+2 = 4, right?  At least admit that much!
DevilFan:  I'm a lawyer, I've been gambling for many years, tomorrow is my wife's birthday.
Vanzack:  Again, that's wonderful, I'm not sure what that has to do with math, but congratulations.  Now, for the last time, do you admit that 2+2 = 4?!  Answer the god damn question already!!
DevilFan:  Listen, I'm a husband and father, last week I wagered over $16,000 on an afternoon of football.  I know what I'm doing here, I've been doing it for 15 years.  Plus, I don't think I've mentioned this, my daughter is having a birthday in a couple of months.
Vanzack:  I give up, you're a moron.
DevilFan:  I own my own house, and tomorrow I have to take the dog to the vet.
Vanzack:  I'm done with you, your stupidity only surpasses your inability to understand math.
DevilFan:  Tomorrow is my anniversary, it's going to be 10 years for my wife and I, I'm a lawyer and I have a kid and german shepherd.

I could have saved an hour of my life if I would have read this first. Look at that Giant, I laughed at one of your posts.

Van, Thank for the teachings on parlays. I found it very useful.

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