Re: on ROI
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Yeah, you're very wrong on this and so is your book. You can bet line movements for this and higher.
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Please give me an example.
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Umm... Work back through the Pinny expected loss per dollar for the avg high volume arbitrageur. The long run is fairly quick with this. Avg negative ROI there is around 3.6 to 3.9 which implies at worst a corresponding positive ROI of at least this level at other books. If you throw in any actual bonus dollars (which I'm sure you are excluding and as I am for pure ROI discussion) you can quickly earn a fairly nice living. The swings are much greater, but I'm sure you can manage to get several nice plays per day at a decent Kelly stake with a mid five figure to low six figure bankroll and a small amount of talent.
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I just want to point out that most people who "ride dirty" (i.e., those who do not arbitrage their soft lines) will have an ROI around 2-3%. Arbitrageurs won't touch a soft line of +105 when the Pinny line is -105/-105. There is no profit from doing so (excluding bonus considerations). But this is a soft line with an expected ROI of 2.50%. People who "ride dirty" will bet this for value. Arbitrageurs will wait till the soft line moves to at least +106 before they begin arbing. If you work backwards using Pinny results you are filtering your sample size to bets with a ~3%+ edge. Since there any many, many more 1%-2% ROI bets your long term ROI will be around 2%-3%.
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