A player is planning to play a £1000 tournament and is selling action at 1.2. Lets say its a 100 player tournament and the prize pool is distributed as follows:
My idea is to buy at spot rate and if the player cashes, pay juice on the winnings rather than at the start of the tournament. Possibly paying more juice for finishing in the higher positions.
Is there a way of working out a fair 'juice structure' if they are worth the 1.2 that they say they are?
If I understand you, it makes no difference. I think the player is offering to sell you 10% of his tournament cash for £120. You want to buy 12% for £120, but kick back 1/6 of what you get (that is, if he cashes for £6,000, you are entitled to 12% or £720, but give him back one-sixth or £120 as juice). Either way, you end up with 10% of his cash for £120.
If I correctly understand your thought I dont think any1 will accept this.
As inwestor you are taking risk of not cashing anything, thats why players need your juice.
What Aaron said, except it sounds like what you actually want to do is just buy less action.
As I understand what you are saying you want to, instead of paying 120 for 10%, only pay the 'fair' 100, but receive less than 10% of winnings, calculated in such a way that the EV is the same. This is exactly the same as just paying 100 for 8.333%. You're just buying a smaller stake.
