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

The second is if you know ahead of time that you will hedge, why do you put the last game in the parlay to begin with when it pays more to leave it out for the same exact bet?

Thats the whole thing van, no one will ever say they know ahead of time they will hedge, even if they get into the habit of doing it.  There is no arguing the factual math involved that it is clearly better just to do a 3 teamer for 3 sunday games than to do a 4 teamer with the monday game.  Use a 16 week season for easy math, you should hit the 3 teamer twice (1 in 8...12.5%) and you should hit the 4 teamer once (1 in 16...6.25%)  If you are planning to hedge that 4th game the 2 times during the year you are going to be in a position to do so, you are clearly better off just leaving it off.  The problem is, its so rare for the average person to get in that position, that they mentally freak out and take the guaranteed money.  There is more guaranteed money winning 2 three-teamers over 16 weeks, than hedging 2 potential winning 4-teamers.

14 weeks out of 16 you will lose $100 on Sunday whether its a 3 teamer of sunday games, or 4-teamers with the monday game thrown in.  The other 2 weeks you would have either a) already cashed your 3 team parlay or b) won the first 3 legs of the 4 teamer with one pending.

What DevilFan doesnt see here is that by placing the 4 team parlay in the first place, YOU ARE ROLLING ALL YOUR WINNINGS INTO THE LAST GAME.....THATS WHAT THE PARLAY DOES.  Now you want to come off the 4th game so you pay the juice to bet the other side of the game you already rolled all your money into at worse odds.  So you are paying juice twice, and one of those is at bad odds. 

3 team parlay you will lose 100 14 times, and win 600 twice

4 team parlay you will lose 100 14 times, and then the 2 times you are able to hedge the 4th leg even if you get even money you get 500 twice

JUST LEAVE OFF THE LAST LEG....ITS SIMPLE AND ITS NOT SOMETHING THATS A MATTER OF OPINION...ITS FACT

The whole key here is if you know you are going to hedge ahead of time or not.  The only parlays I do are generally 2-teamers with team and total (like +1.5/unders or -1.5/overs in bases) so Im never in position to hedge.  I understand that the few times you hit the first few legs it seems like it makes sense to hedge, but its better to just do less legs or better yet not parlay at all.  If your last leg of a parlay you let ride looks great at halftime and you can get a big middle or say you have a team at a pk, up 20, and there is a +2000 live ML on the other team to come back...sure, even if its a little juice to skim I would hedge 100 to win 1500 with another 100 to win 1500 pretty much no matter how much of a lock a game looks...just to prevent anything from getting damaged in my apt.  (something I learned mavs/heat game 6 by not taking a big live heat ML early in the game to hedge series bets...that I shoulda done)  But thats not what we're talking about.  There are many people who practice throwing the late game or the monday game at the back end of parlays with the plan to hedge if they are fortunate enough to get to that position...

The point is, its guaranteed money in your pocket with an already won 3-team parlay if you are in position to hedge the 4th...and its better guaranteed money...so dont put on the 4th game in if it starts after the other 3 and you think you might hedge it if you are sitting at 3-0.  Think of it as straight bets....Would you put in 4 separate 550 to win 500 plays with one of them being the monday night with the intention to come off that play if you are 3-0 Sunday because you want to lock in being +3units?  Why go 4-1 +1450 when you can go 3-0 +1500?  ITS THE SAME THING

P.S.  Flat bet, straight bet....reads vans money management thread

Thanks Van....

I was waiting for someone to start a thread asking you if you thought the cardinals should have let the niners score late at the 1 when they were up 17-13

I have to take my crack at this....it's just too funny.

You have to pay a tax to hedge.  So it is stupid to hedge unless something has fundamentally changed about that bet that makes it less than the EV that you would have to pay in vig to get out of it. 

You have this on one hand.  And you have "guaranteed money on the other. 

Here is where I think the rub is for DevilFan et al.  They have a problem with expected value (which amazes me cuz KOAJ is purely a value better in baseball).  They think they are guaranteeing profits (which they are...just less profits) when in reality, they are agreeing to taking a discount by hedging and accepting/guaranteeing the money early.  They think they are avoiding the risk, but they are really just taking a discount.  They think it's worth it, but it is not.

What they will say is that they don't know what is going to happen in the last game.  This is true.  But as your number of bets nears infinity, you will hit that bet 50% of the time.  Sure, you can have some bad luck and go 0-3 in those last games of a parlay.  But OVER TIME, it will even out.  And if you DO hit 50% of those last games of a parlay and you DO NOT HEDGE, then you will come out AHEAD of where you would have been had you hedged.  Where people like DevilFan miss the point is you have to understand that you WILL WIN 50% of those final parlay bets OVER TIME.  They just don't want to risk a bad streak of say losing 5 straight of those last games.    Thus, they agree to take a discount on their money. 

Over time, it does cost them money.  This can not be debated.  But apparently they feel the security is worth avoiding the short term fluctuations where they may incur losses.  This addresses this post:

if you have 4 such parlays and you hedge evertytime using your numbers

1 - 424 * 4 = 1696 profit
2 - 500 * 2(ev) = 1000 profit

thats IF you can consitently expect to hit the last leg 50% of the time. i dont think anything is guaranteed

And KOAJ, you are right.  But look at baseball.  You bet a dog at +150 because you think you are getting VALUE.  There is no guarantee that the team wins....but you think +150 is VALUE so you bet it understanding that it's probably more likely that you lose the bet.  In the parlay, there is no guarantee that that last team wins either, but (if you capped properly) you have to think that you have a 50% chance to win the bet before the game starts.  IF YOU DO, then how can you hedge?  You're taking a discount to guarantee yourself money when letting it ride will result in you winning the parlay 50% of the time (over time).  And that, my friend, is more value.  

You bet value in baseball ALL THE TIME knowing that your team is probably more likely to lose then to win.  But you know that over time, you can probably go 50% and make a profit.  So why go and hedge the last game a parlay where over time it is likely you WILL hit 50% (you bet +105 to +160 dogs and think you can hit near 50%.....don't you have confidence that over time you can hit 50% with -105 to -110 favorites???).  And if you DO hit 50%, you'll get a much greater return then hedging over time. 

It really is just like betting value in baseball....you just need to see the connection. 

As for DevilFan, I don't think there is any hope for him. 

So in summary here are the expected values in this situation:

1.  Hedging 424

2.  Don’t hedge 500

3.  Leave the last game off of the parlay 600