The Well: King Yao

[duggie53]

Do you ever use in-running betting to hedge your positions? Do you have any advice on in-running betting strategy?

[easternbloc]

do you play poker for fun? what limits do you normally play at?

[King Yao]

I don't use Kelly, even if I did, I probably wouldn't be able to answer your mathematical question.

The guy who wrote the post linked below this seems to use it and know it very well...I'd ask him questions:

http://forum.sbrforum.com/players-talk/2...ion-part-i.html

[King Yao]

"do you play poker for fun? what limits do you normally play at? "

I rarely play poker now. But once in a while I'll go down to Foxwoods and play 75-150 stud. I don't think I currently have any edge in that game, but I enjoy starting to learn it and thinking about it. I'd play more often if the drive to Foxwoods was shorter for me.

[rjp]

I've read his stuff--it's good.

If you don't use Kelly, then what do you use?

[King Yao]

"Do you ever use in-running betting to hedge your positions?"

I don't use in-game betting for the sole purpose of hedging. When I do use it, it is for the purpose of getting positive EV bets. I used it much more often 2-4 years ago, at WSEX and when Tradesports first started. I think there is less edge now as the marketmakers are smarter.

"Do you have any advice on in-running betting strategy? "
I'm not sure if this advice will help...but here's a few things that come to mind:

- be careful if you have TiVo or a DVR. I found out that there is about a 1-2 second delay on Tivo when I had two tvs in the same room, one with tivo the other without.
- don't leave standing orders out there during play. there's little upside.
- in football, understand the exact scenarios when a team that is ahead may be looking to score, or just looking to run out the clock. The period between the 8:00 to 4:00 left in the 4Q and one team ahead by more than 1 score seems to be the less uncertain section. I think it'll depend on coaching philosophy, dominance (or lack thereof) in the running game and urgency to win a game. Once it gets under 4:00, it becomes more obvious to everyone that the team ahead by more than 1 score is not that interested in scoring.

[King Yao]

"If you don't use Kelly, then what do you use? "

Often it is the sportsbooks limit that limits my action, so I don't even need to quantify how much I actually want to bet. When they allow big action (say a NFL side), I just bet the amount that makes me feel good. That probably sounds like a strange answer since most of the issues I write about are predicated on numbers and not on feel. I've gotten to the point where I know how comfortable I am with how much I bet. If losing $X feels queesy to me, then I won't bet that much.

I will bet more when I feel more certain about the edge, not necessarily the amount of edge. For example, if I'm laying -110, but I'm very sure it should be worth -120, I don't mind betting big. On the other hand, if I think a bet is worth -130 (when the line is -110), but I'm not nearly as certain of fair value, then I discount my own opinion a bit, and give the market a bit more credit...and actually bet less. In the first case, I have more certainty I have edge. If I repeat those bets over hundreds of bets and throw them into a portfolio, the risk is diversified and the overall edge in those type of bets is fairly certain to me. In the second case, I am not as certain and there is a higher chance I am wrong. So even though there seems to be 20 cents of edge, it may be that I actually have no edge or negative edge.

The way I see Kelly, even if I used it, I'd probably bet a certain fraction of kelly. Many pro gamblers I know bet half-kelly. Why is this? Its because they are adjusting kelly to fit to their own risk preferences. Full-kelly is too risky for them. So I am doing the same thing, except I am comfortable knowing how I feel about risking the dollars on any given bet. I have nothing against people that do use Kelly, I just don't use it and I don't think its necessary for everyone.

[rjp]

I began using half kelly myself recently, and so far I'm very pleased with it. When you bet big and run into limits like yourself then you're right, it doesn't matter. [img]/images/graemlins/smile.gif[/img]

[DeezNuts]

How much of a correlation did you find between derivatives trading and sports betting/poker? What are the major differences?

I interned at Susquehanna in 1998 on the Pacific Options Exchange floor(didn't stay with it because hated the hours and didn't want to move to East Coast). Without getting too personal, did you know Rob Ring(equity options trader) or Shirley something(boss)? Rob used to eat everybody else's lunches. The shouting matches that would follow were hilarious.

[Ganchrow]

My Kelly calculator handles multiple independent simultaneous wagers.

This post I made on Kelly details the generalized solution.