[Jerrod Ankenman]

[ QUOTE ]
oops originally addressed wrong! Try this please.

I am a "for fun" sports better. I have a 10 Leg Parlay Card (cost $10) with 5 winners in, 5 games to go. (pays $ 6,000 - I know parlays are sucker bets)

Games left: South Carolina -6, game on 12/29, Michigan +1, game on 01/01, Boise State +8, game on 01/01,
LSU -9, game on 01/03, Ohio State -8, 01/08.

At what point do I start to bet the other side to insure a "win". What amount?

thanks,

Kathy

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Hedging for "for fun" bettors.

So you have this bet. Your bet is equivalent to "g6 AND g7 AND g8 AND g9 AND g10." Now suppose all these games are sequential -- the Michigan and Boise State games might overlap, but whatever.

Suppose all your sides are coinflips to come in. Then you have a (1/2)^5 chance of getting $6000. Otherwise you get $0. (Doesn't matter what you paid for it, plus it'll make you sick.)

So your EV right now is $187.50.

Consider the South Carolina game. If you WIN this game, your EV goes to $375. If you lose, it goes to zero. The difference between these two numbers is called the *delta* that this game has on your bet. Delta is like your risk on this game.

You can make other bets to increase your delta on this game. For example, you could bet $110 to win $100 on South Carolina -6. That would increase your delta by $210. But what you're talking about is "hedging," which is the process of reducing your delta. Say you want to reduce your delta from $375 to zero; that is, you want to lock up the profit you've already made and take no more risk (except for line movement risk in the other games, which you can't hedge easily). Then you need to make a bet such that the difference between South Carolina losing the bet and winning the bet is $375.

So supposing you can get the same spread at -110, you would bet $196.43 to win $178.57. Now whatever happens, you have zeroed out your risk. If SC wins, then your parlay goes up in value to $375, but you lose 196.43, for a total of 178.57. If SC loses, you win your bet for 178.57, but your parlay goes to zero.

The downside of this is that you have to pay juice on each game to hedge - here you lose 187.50 - 178.57 = 8.93 in juice. These amounts will get larger if your parlay bet wins.

You don't have to completely hedge out your risk, of course. You could make a smaller bet, thus hoping that SC will win, while having less riding on the outcome. So you just have to decide how much you want to have riding on this game. Then reduce your delta by hedging such that your delta is equal to the amount of risk you want.

Jerrod