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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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DevilFan

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Joined: Apr, 2006

Posts: 13492

Posted: Sep. 13, 2007 - 5:43 PM ET #326

poundcake... go f-yourself

dont't be jealous.....

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lbcake

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Joined: May, 2005

Posts: 26984

Posted: Sep. 13, 2007 - 5:47 PM ET #327

jealous........you go fuck yourself

I haven't worked in 3 years. I retired at the age of 44.....so put that in your conceited mouth and chew on that.

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CanucksPlaybook

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Joined: May, 2007

Posts: 608

Posted: Sep. 13, 2007 - 7:51 PM ET #328

Great post vanzack, totally agree with you. Mathematically, you are 100% right. HOWEVER, something I learnt in Intermediate Microeconoics is UTILITY. For some people, a certain dollar amount after a certain "plateau" doesn't mean as much as the previous dollar earned. People tend to be risk-averse. Pretty ironic writing this statement on a gambling forum. But math isn't always considered when thinking short-term happiness. But let me ask you THIS:

You have $1,000,000. I offer you to flip a coin with me. If you win, give you an additional $2,000,000. If you lose, you lose your millon. would you take on the risk? Of course if it was a question of $100/$200, you would take the offer in a heart-beat.

Now I don't mean to defend these morons and their illogic but as a recreational player, I hedged a big parlay a few years back. Let me explain:

I had a 3-gamer, 5-gamer and a 6-gamer, both needed the same final leg on a Saturday night (10 PM) hockey game, which I was looking forward to watch all week. It was two highly offensive teams with little defence. I had the OVER 6.5. I was with my ex-gf and a bunch of friends, waiting for the game to start with anticipation. It was Thanksgiving long-weekend and I was just beginning to get wasted.

Now my total risk was only $56, the total payout was something like $3,400 (if I win). That's a LOT for any first-year university student. All my plays were ranging from Thursday night to Saturday afternoon college ball, to Saturday evening hockey, to LATE Saturday night hockey. My book pays out parlays in REAL ODDS.

Eg; A four-play parlay at -110, -110, Ev, +105 would pay out (1.909*1.909*2.00*2.05)-1 = 13.94 X Wager

I was not whilling to go depressed that night because something that has been going so well for 3 days get spoiled on a bad beat.So I hedged my play for $800 more, picking the Under at +110. I was happy because this meant my Over was more solid. This means if I win, I'll have $2,600 and if lose, I still make about $880 ($1680+ balance in my account).

Of course I wouldn't hedge 4-play parlays on a regular basis like some of the ignoramouses in here. But sometimesyou just go crazy and make crazy parlays risking little, not really expecting to win but have solid plays in it, and that's asides from your regular plays. And one day, once in a blue moon, all of a sudden you are in a spot where one game can make or break you for thousands of dollars.

Oh and for the curious ones, that hockey game was 3-2 until the home team tied it up with 29 seconds remainning. 3-3, automatic win as they'll play until someone wins. I did not regret hedging because my marginal utility was very little from $2,600 to $3,400. Like the next unit in profits didn't mean as much at that point as it would if you were up only $100.