Hedge advice

[bangminton]

Guys, I have a number of tickets waiting for Carolina by 4 tomorrow.

I am wondering if hedging on SF PK is a good idea or if I should buy the points for SF (Pinny drop-down box currently has SF +2 -119, hope to see SF +3 tomorrow) as the worst case scenario is Carolina win by 3 or less.

Thanks.

[leoj]

Thats not really a hedge and I would never do something like that where you can lose both sides.

If you have pinnacle, they hale alternate spreads and you might be able to bet SF +3.5 or +7.5, use those if you insist on hedging.

[bangminton]

Got it, leo.

I checked Pinny & they have alternate line of San Fran +7.5 -300 but I didn't see any +3.5.

Will check again tomorrow and see if there's any line change. If not, I may just let it ride.

P.S: Hey Chin or PLP, maybe a thread about hedge strategies would be beneficial

[Opportunist]

I actually have a fair amount, and it could build by game time for Reims NTL, currently it pays 1.513 on Pinny should I take advantage. I will see where I stand, as the game isn't until 3:00 p.m., or even monitor it for live betting should it be available which I expect so, especially if Reims can score first.

[Kaboshed]

damn i haven't checked my carry overs today from last night's cbb T and hockey wins, hoping that soccer got there...

[ProlinePlayer]

Probably a lot of players in the same position today.

This has been a very solid week and the Carolina game, although never a great play in itself, has been available all week as a good filler game.

And now we all have the same question - let it ride or hedge some of the action offshore? I myself have no easy answer or set policy on these. But the first thing to be done is of course to work out how much cash is actually riding on the game. And then ask yourself if you're comfortable risking that amount on the game.

Be interested in other thoughts on this.

PLP

[ProlinePlayer]

Thats not really a hedge and I would never do something like that where you can lose both sides.

You know I can't really disagree with this because it pretty much covers what I would do. But that being said I'm not sure it's right.

Reminds me of something I was reading a couple of months back (if I remember where I'll fill it in later), the writer was discussing arb situations, middles, hedging and stuff like that. He pointed out that many sharp players tend to miss very favourable situations because a reluctance to middle themselves. For example betting the dog +2.5 and the favourite -3.5 could, depending on the prices (money line) connected to the lines, be a position where both sides are +ev. He states that a lot of potential is missed by players not taking advantage of these spots.

I'd be curious to know what the math is in these situations. For example in the above, holding a position on Carolina -3.5, could it be correct to play SanFran at +2.5 as a hedge?
Maybe Matty or one of our other math experts can answer that question?

PLP

[MattyKGB]

To hedge or not to hedge:

Example = "should I hedge SF ML @ -104?"

Step 1: Identify all possible outcomes.

Outcome A: Car wins by 4+.
Outcome B: Car wins by 1-3.
Outcome C: SF wins.

Step 2: Figure out the probability of each scenario. You can use PLP site and/or Pinny's implied odds for this.

ML is SF -104 / Car -106. This implies win probs of 0.498 for SF and 0.502 for Car.
Car -3.5 is 0.382 according to PLP (and we'll trust him on this). So that means outcome A is 0.382, outcome B is 0.502 - 0.382 = 0.120 and outcome C is 0.498.

Step 3: Figure out what your ending bankroll will be under each scenario, as a function of the hedge amount. Set this up in a spreadsheet.

Let X = the amount you hedge on SF ML -104.

Outcome A: Ending roll = starting roll + proline pending amount - X.
Outcome B: Ending roll = starting roll - X.
Outcome C: Ending roll = starting roll + X * (204/104 - 1).

Step 4: In your spreadsheet, take the natural logarithm LN of the ending rolls from step 3 under each outcome.

Step 5: In your spreadsheet, calculate the weighted average of the natural logarithms in step 4, weighted by the probabilities from step 2.

Step 6: Use Excel solver to find the X that maximizes the value in step 5. Make sure "must be non-negative" is checked in the solver box. X = 0 means that you should not hedge.

[MattyKGB]

"Divide the edge by the odds" is a very simplified version of the Kelly Criterion that works in a limited number of scenarios. What I posted above is the REAL Kelly Criterion

[MattyKGB]

If you aren't familiar with Solver, you can always use good old trial and error...set up your spreadsheet, then start changing X and see how the final value (the weighted average of the logarithms of the ending bankroll) changes. Play with it until you find the X that makes the final value as large as possible.