Should I hedge this "bet"? What is the highest EV move?

DrJ · #1 01-03-2007, 08:58 PM

I've sold a pair of tickets to a game, but it is contingent upon another game.

If Team A wins, tickets are good, sale goes through, yadda yadda. If Team B wins, game doesn't happen, money has to be refunded.

Team A will be favored in the contest. Since Team B is yet to be determined, the spread is unknown.

Which offers higher EV:

1) Keeping my straight bet on Team A, who will be favored?

2) Hedging my bet, by betting half of the amount on Team B. Guaranteeing 50% of my money in most circumstances, but with a slight possibility of getting 150%?

Is #2 a higher EV no matter what the spread is? How much does the EV change as the spread increases?

DrJ · #2 01-03-2007, 09:18 PM

Also, I'm not a sports gambler. This is a one time deal. Not sure if that factors into this at all. Perhaps I should not be worrying so much about EV and instead it boils down to simple bankroll management...

MCS · #3 01-03-2007, 09:26 PM

If this is not super-significant money to you, you should make the bet on Team B if and only if you think it is a good bet on its own.

Overall EV is the sum of the EV of each part. So your total EV is your ticket sale EV (which is total price times chance the game happens) plus your EV from the game bet.

Since most sports bets are slightly -EV, the most likely thing is that betting on Team B will reduce your variance at the cost of a bit of EV. It's up to you if that trade is worth it.

P.S. If Team B is an underdog, then you'll be getting odds if you bet them to win straight up. Choice 2 will be more like either 50% or 190% with the 50% more likely. You could bet Team B with the spread to make it 50/150, and then you'd have a shot at Team B losing but still covering the spread, which would be the best possible result for you. [img]/images/graemlins/smile.gif[/img]

DrJ · #4 01-03-2007, 10:41 PM

In the 2nd scenario, how can I figure out what percentage chance I have at the 150%? Is there any database that says "Teams that are dogs by 4 1/2 points cover the spread and lose the game 10% of the time"?

MCS · #5 01-04-2007, 01:03 AM

Well, one way would be to assume that Team B covers the spread 50% of the time. Convert the money line into a winning percentage--for example, if they're +150, then they win the game outright 100/250 = 40% of the time. So that means they cover but don't win 10% of the time (50-40).

Note that I am ignoring the possibility of a push, which happens moderately often with spreads of 3 and 7, and 4 to some degree, but that doesn't change things much.

King Yao · #6 01-04-2007, 01:26 AM

I wrote a three-part article on Hedging in Sports Betting for the Two Plus Two Internet Magazine. The first two parts are online, the third and last part will be in the February edition of the magazine.

I've provided the links below, but you can always go to the Magazine link on the top of the left margin on TwoPlusTwo.com to access the magazine and the articles.

Hedging in Sports Betting Part 1: Valid Reasons to Hedge

Hedging in Sports Betting Part 2: Mistakes Made when Hedging

Overall, my advice is that if the money doesn't mean that much to you, then don't bother hedging. Since you aren't an experienced sports bettor, it will be difficult for you to find a positive EV bet as the hedge. If I were in your shoes, I would ride it and hope for the best. I would also read those articles, maybe your situation is different than I'm assuming.

Good luck!

MCS · #7 01-04-2007, 01:30 AM

[ QUOTE ]
Since you aren't an experienced sports bettor, it will be difficult for you to find a positive EV bet as the hedge. If I were in your shoes, I would ride it and hope for the best.

[/ QUOTE ]

If it wasn't clear before, I basically feel the same way unless the amount of money is very significant to you.

NajdorfDefense · #8 01-04-2007, 01:33 AM

Also, as we learned during the Mansion promo, hedging is for pussies. [img]/images/graemlins/grin.gif[/img]

MCS · #9 01-04-2007, 01:36 AM

[ QUOTE ]
Also, as we learned during the Mansion promo, hedging is for pussies. [img]/images/graemlins/grin.gif[/img]

[/ QUOTE ]

Hahahaha, that's true. I myself hedged (doh!) but I was a student to whom $450 was a pretty big deal.

DrJ · #10 01-04-2007, 12:48 PM

Thanks for the help guys!

After reading these responses and the articles, I think it's clear that I shouldn't hedge. 50% of the money really isn't a huge amount to me.

Saw the mansion promo earlier in the year at one of my FF sites. Couldn't take advantage because my "bankroll" was tied up in this investment....hopefully this one cashes for me. [img]/images/graemlins/wink.gif[/img]