Does it EVER make sense to give up some value in a +EV coinflip?

[BiPolar_Nut]

I'm finally coming around to thinking in terms of EV instead of locking in results w/ a hedge. I took three 3-team parlays earlier today in MLB (mistake...I know)

Anyway, I now have 3u wagered and stand to win 10.8u on the last game which I consider a coinflip. I actually had to fight with myself to grow the small nads needed to NOT lock in a ~3u guarantee with a ~6u hedge. Thank you experienced posters here for drilling that lesson into threads I've lurked!

I am wondering if there are EVER any circumstances when it would actually make sense to give up a +ev coinflip situation? My first thought is no, but then thought: what if your entire bankroll wound up on such a coinflip?

Granted, that should NEVER happen w/ proper BR management.

Are there any other situations where wimping out for a guaranteed smaller win would make sense, even considering situations one should never find themselves in but could happen to n00bs or via misclicks? (Not including hedge bets based on breaking news/injuries/other circumstances making the final action not a coinflip)

[almostbusto]

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Granted, that should NEVER happen w/ proper BR management.


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first of all that is not true. well perhaps you should have your whole bankroll on a single proposition. but your stake in a proposition could potentially be equal to your bankroll. lets say the odds of something occuring are 10%, some book makes an error and offers 300 to 1. this is a situation where you would bet at least 1% of your bankroll on for a potnetial payoff of three times your bankroll. at that point its make sense to hedge even if you can only lay it off at 1 to 20 (which is -EV in a strict sense) because the leverage value(basically what is your discount rate?) from the hedge (remember your bet loses 90% of the time) exceeds the straight EV of betting straight up.


also, the hedge line in itself could be +EV. its +EV to take advantage of +EV wagers so hedging in that case i just making two +EV wagers. +EV + +EV = +EV

example: A offers you 1.05:1 that a coin will flip heads. you bet 10K with him. B offers you 1.05:1 that the same coin will flip tails on the same flip. obviously you should take his bet too. this is how sportsbooks operate if you think about it.

[Homer]

I am wondering if there are EVER any circumstances when it would actually make sense to give up a +ev coinflip situation? My first thought is no, but then thought: what if your entire bankroll wound up on such a coinflip?

If your entire bankroll wound up on a coinflip, you should definitely hedge. EV is just one part of the puzzle. Really, it all boils down to your certainly equivalant (CE). That number basically describes what amount of how much money you should accept (or give up) in order to avoid a situation with built-in variance. I don't quite understand how the formulas were derived, but luckily I am capable enough to program the formulas into Excel to figure things out for me. Here is an example:

You have a $20k roll. You bet $500 on a 3-team parlay getting 6:1. You hit the first two legs and are wondering if you should hedge the third. So, you plug into your CE calculator your bankroll ($20k), probability of winning (50%), probability of losing (50%), amount you stand to win ($3k) and amount you stand to lose ($500). The calculator tells you that your CE is $1011. In other words, even though your EV at this point is $1500, you should be willing to hedge if you can lock in any amount equal to or greater than $1011.

Of course, the real question is whether you should have bet that much to begin with.

Granted, that should NEVER happen w/ proper BR management.

Agreed, in most cases. Though I am sort of wondering if there are exceptions to this in cases of futures and other bets that involve huge +EV dogs. For example, if I had the opportunity to hit a bet like crockpot's 800:1 bet on the Tigers, I would have put a bunch of money on it and would have inevitably found myself hedging later. The question is, does that mean my initial bet was too large? I'm not sure.

[Thremp]

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The question is, does that mean my initial bet was too large? I'm not sure.

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I think this should be a resounding NO. If you take a 80-1 shot at odds of 800-1 and bet something vaguely representative of the edge you have (.5-1%) you'll find yourself in a must hedge situation. As even after hedging you are still +EV. When lines are very very wrong you can bet more than you should normally with the intention to hedge.

[BiPolar_Nut]

Great discussion so far! Thanks a lot! Hope there's more [img]/images/graemlins/smile.gif[/img]

[bigalt]

This of course isn't a sports betting only topic. There was a pretty monstrous thread in the zoo a while back debating whether you would push with your entire bankroll preflop with AA.

[Thremp]

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This of course isn't a sports betting only topic. There was a pretty monstrous thread in the zoo a while back debating whether you would push with your entire bankroll preflop with AA.

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Well not anymore obv.

HAHAHA

I laugh to keep from crying.

[BiPolar_Nut]

True. I was most interested in oddball sports situations I may inadvertantly find myself in, so I asked here.

[crockpot]

i think if you find yourself hedging the last game of your parlay, it means you should have bet your parlay at one team less to begin with.