Two Plus Two Poker Forums Hedging FAQ
 User Name Remember Me? Password
 Register FAQ Search Today's Posts Mark Forums Read TwoPlusTwo.com

 Notices

 Sports Betting Discussions related to wagering on sporting events.

 Thread Tools Display Modes
 11-14-2017, 03:12 AM #1 PokerHero77 grinder   Join Date: Oct 2008 Posts: 586 Hedging FAQ Many on this forum have asked "should I hedge" when confronted with a potentially large payout with one or a few legs to go on a parlay (accumulator) ticket. In this thread I will pose hypothetical hedging questions which I will answer in the context of expected growth. So, each question will rely on the player's bankroll, and some idea of the edge(s) the player may have for the wagers in question. Generally speaking, I believe expected growth is a fair way to compare different betting approaches. Also, each question will be answered "in a vacuum", that is with no consideration to other open bets the player may have. QUESTION 1: I played a 10 team parlay ticket with 6 games played Sunday morning, 2 games played Sunday afternoon, 1 game played Sunday night, and the final game played Monday. I wagered \$4 on my \$5,000 bankroll, with odds of 799 to 1 if all 10 selections win. I estimate my win rate per leg at 54%, due to the odds printed several days prior to purchasing the ticket. I expect to take the opposite side of any of the non-morning games at -105, with a 4% chance of winning both the opposite side and the parlay side. When should I hedge assuming (a) I win the first 6 games, (b) first 8 games, (c) first 9 games? ANSWER: With no hedge wagers, your expected growth on this ticket is a paltry 0.024%. The optimal bet size is \$4.30 resulting in a fractionally higher EG. The proper hedge wagers should be the following: (a) \$70 on either of the 2 Sunday afternoon games; (b) \$650 on the Sunday night game; (c) \$1,400 on the Monday night game. Doing so will result in an expected growth of 0.037%, almost double what you get without hedging. If you had known you should be hedging, then your parlay wager should be \$12, and your hedge wagers should be the following: (a) \$375 on either of the 2 Sunday afternoon games; (b) \$2,100 on the Sunday night game; (c) \$4,500 on the Monday night game. With the above bet sizing your expected growth increases to 0.066%. In the ideal case you would hedge each leg after the first 6 wins, which you cannot do here because there are 2 games played simultaneously Sunday afternoon. This results in an expected growth of 0.095%, about 4x the original non-hedged wager.
 11-14-2017, 11:35 AM #2 Iowa! old hand     Join Date: Jun 2009 Posts: 1,316 Re: Hedging FAQ Not starting with the most basic/common example (one leg to go on a future/parlay/teaser etc) is a mistake.
 11-14-2017, 04:38 PM #3 PokerHero77 grinder   Join Date: Oct 2008 Posts: 586 Re: Hedging FAQ I chose the above parlay example because waiting until the final leg of a parlay to hedge is often a mistake.
 11-14-2017, 07:55 PM #4 Like journeyman   Join Date: Mar 2017 Posts: 352 Re: Hedging FAQ That was an absurd example to use
 11-14-2017, 07:57 PM #5 PokerHero77 grinder   Join Date: Oct 2008 Posts: 586 Re: Hedging FAQ I forgot to mention that the above parlay was setup with no ties. I'll try to be clear with that in the future, because the possibility of ties will impact hedging tactics.
11-14-2017, 09:03 PM   #6
akkopower1
centurion

Join Date: Feb 2017
Posts: 144
Re: Hedging FAQ

Quote:
 Originally Posted by PokerHero77 I forgot to mention that the above parlay was setup with no ties. I'll try to be clear with that in the future, because the possibility of ties will impact hedging tactics.
Could we please start with something simpler?

 11-14-2017, 09:53 PM #7 Mihkel05 banned   Join Date: Jul 2015 Posts: 4,835 Re: Hedging FAQ Fk the haters. You just made my top 10 power ranking. Then again every other team massive disadvantage against clear #1 overall n00b. Yes, your example was kinda dumb, but you actually posted real content. That already makes you a 1%er. And I don't think its regurgitated. (BTW Poogs that post recently was quite good and I was impressed. Your English skills have really made it. Congrats.) If I was to transport myself back in time years ago, lets assume I somehow end up with a large edge + large size position. (IE the synthetic you end up with on a non-simultaneous event with a parlay or teaser.) Obv I wanna eat everything up at 0EV or better. And there are no reasonable solutions for derivs. But what would one do if they simply had +900 for a -300 fave for 18% of their BR. How would I go about solving that? Not that its useful anymore really, but
02-05-2018, 12:01 AM   #8
PokerHero77
grinder

Join Date: Oct 2008
Posts: 586
Re: Hedging FAQ

Quote:
 Originally Posted by Mihkel05 Fk the haters. You just made my top 10 power ranking. Then again every other team massive disadvantage against clear #1 overall n00b. Yes, your example was kinda dumb, but you actually posted real content. That already makes you a 1%er. And I don't think its regurgitated. (BTW Poogs that post recently was quite good and I was impressed. Your English skills have really made it. Congrats.) If I was to transport myself back in time years ago, lets assume I somehow end up with a large edge + large size position. (IE the synthetic you end up with on a non-simultaneous event with a parlay or teaser.) Obv I wanna eat everything up at 0EV or better. And there are no reasonable solutions for derivs. But what would one do if they simply had +900 for a -300 fave for 18% of their BR. How would I go about solving that? Not that its useful anymore really, but
For your simple situation (solving for one variable) I suggest MS solver or its open source equivalent as the easiest method.

You can find an exact solution by setting up an EG equation, taking its 1st derivative, then set to zero.

But with foreknowledge that you can later hedge into a position, you are probably better off wagering more than Kelly tells you, which was my point above. The calcs for that require numerical methods which I'm guessing go beyond what most here want or care to understand.

A good example would be properly sizing a futures WS bet, understanding that there will likely be decent (i.e. +EV or short price) hedge opportunities in individual series games going forward.

 02-10-2018, 01:12 PM #9 borg23 Carpal \'Tunnel   Join Date: Nov 2012 Posts: 8,047 Re: Hedging FAQ if you're gonna hedge then don't make the late bets
 02-11-2018, 10:32 AM #10 Like journeyman   Join Date: Mar 2017 Posts: 352 Re: Hedging FAQ Hey look, more terrible advice from someone who doesnt know a thing about the subject
02-11-2018, 04:41 PM   #11
JasiuZ
newbie

Join Date: Jun 2010
Posts: 46
Re: Hedging FAQ

Quote:
 Originally Posted by PokerHero77 Many on this forum have asked "should I hedge" when confronted with a potentially large payout with one or a few legs to go on a parlay (accumulator) ticket. In this thread I will pose hypothetical hedging questions which I will answer in the context of expected growth. So, each question will rely on the player's bankroll, and some idea of the edge(s) the player may have for the wagers in question. Generally speaking, I believe expected growth is a fair way to compare different betting approaches. Also, each question will be answered "in a vacuum", that is with no consideration to other open bets the player may have. QUESTION 1: I played a 10 team parlay ticket with 6 games played Sunday morning, 2 games played Sunday afternoon, 1 game played Sunday night, and the final game played Monday. I wagered \$4 on my \$5,000 bankroll, with odds of 799 to 1 if all 10 selections win. I estimate my win rate per leg at 54%, due to the odds printed several days prior to purchasing the ticket. I expect to take the opposite side of any of the non-morning games at -105, with a 4% chance of winning both the opposite side and the parlay side. When should I hedge assuming (a) I win the first 6 games, (b) first 8 games, (c) first 9 games? ANSWER: With no hedge wagers, your expected growth on this ticket is a paltry 0.024%. The optimal bet size is \$4.30 resulting in a fractionally higher EG. The proper hedge wagers should be the following: (a) \$70 on either of the 2 Sunday afternoon games; (b) \$650 on the Sunday night game; (c) \$1,400 on the Monday night game. Doing so will result in an expected growth of 0.037%, almost double what you get without hedging. If you had known you should be hedging, then your parlay wager should be \$12, and your hedge wagers should be the following: (a) \$375 on either of the 2 Sunday afternoon games; (b) \$2,100 on the Sunday night game; (c) \$4,500 on the Monday night game. With the above bet sizing your expected growth increases to 0.066%. In the ideal case you would hedge each leg after the first 6 wins, which you cannot do here because there are 2 games played simultaneously Sunday afternoon. This results in an expected growth of 0.095%, about 4x the original non-hedged wager.
What a bull**** is this? If you want hedge after the first 6 wins why You dont bet only six games? You will always losing on parlays hedging.

 02-12-2018, 01:16 AM #12 PokerHero77 grinder   Join Date: Oct 2008 Posts: 586 Re: Hedging FAQ Maybe because the odds on 6 games is -EV. I don't think you understand the primary reason for hedging.
 02-12-2018, 01:23 AM #13 akkopower1 centurion   Join Date: Feb 2017 Posts: 144 Re: Hedging FAQ whether to hedge or not depends on several factors. Your edge with the open bet Your edge after the hedge Your aversion to risk. A scenario I get myself in quite often would be as follows bankroll \$10k open bet; Team A win \$500 at even money hedge is an arb; Team B win at \$2.20 (assume 1.90/1.90 is even money, and assume the current bookies line is perfect, so Team A will win 56.8%) So if we take could the unhedged bet 100 times we would win 57 and lose 43 , assume we always bet 5% of roll. Our bankroll would become ROLL_no hedge = 10,000*(0.95)^43*(1.05)^57 = \$17,779 hedging the position to build an arb guarantees 0.4545% bankroll growth each bet ROLL_hedge = 10,000*(1+0.0045)^100 = \$15,737 (with no chance of ever losing) if you only risk 2% of your roll each trade, the end result becomes; ROLL_no hedge = 10,000*(0.975)^43*(1.025)^57 = \$13,754 ROLL_hedge = 10,000*(1+0.0027)^100 = \$12,457 now if you assume the new price for team B is a little too high and team A is only expected to win 54%, at 5% roll we get. ROLL_no hedge = 10,000*(0.95)^46*(1.05)^54 = \$13,167 ROLL_hedge = 10,000*(1+0.0045)^100 = \$15,737 so........ not too suprisingly Hedge if you have too much skin in the game Hedge if you think the hedge you can take is value
 02-12-2018, 02:00 AM #14 PokerHero77 grinder   Join Date: Oct 2008 Posts: 586 Re: Hedging FAQ Your numbers are not correct. The formulas you used are confusing, and are most likely wrong. I'm not going to bother showing you the proper formulas, as it would likely lead to more confusion. Assuming 56.8% win rate your non-hedged EG is 0.557%. You should have bet \$1,360, not \$500. Your EG would then be 0.932%. With the \$500 bet your hedge bet should be \$39, with EG increasing slightly to 0.558%. With the \$1,360 bet your hedge should be \$818, resulting in EG of 1.340%. Assuming 54% win rate your non-hedged EG is 0.276%. Your hedge should be \$555, with EG increasing to 0.461%. You missed my point stated above which is how much should you bet on team A assuming you will be able to hedge.
02-12-2018, 06:05 AM   #15
akkopower1
centurion

Join Date: Feb 2017
Posts: 144
Re: Hedging FAQ

Quote:
 Originally Posted by PokerHero77 Your numbers are not correct. The formulas you used are confusing, and are most likely wrong. I'm not going to bother showing you the proper formulas, as it would likely lead to more confusion. Assuming 56.8% win rate your non-hedged EG is 0.557%. You should have bet \$1,360, not \$500. Your EG would then be 0.932%. With the \$500 bet your hedge bet should be \$39, with EG increasing slightly to 0.558%. With the \$1,360 bet your hedge should be \$818, resulting in EG of 1.340%. Assuming 54% win rate your non-hedged EG is 0.276%. Your hedge should be \$555, with EG increasing to 0.461%. You missed my point stated above which is how much should you bet on team A assuming you will be able to hedge.
\$500 is the right amount, because I said it was, I never mentioned maximising growth.

My formulas are correct, median return for proportional betting.

you point regarding betting on team A is irrelevant, my hedge is an arb, so clearly roughly 50% of your roll would go on it.

And you sound like a dick, take care

 02-12-2018, 12:33 PM #16 PokerHero77 grinder   Join Date: Oct 2008 Posts: 586 Re: Hedging FAQ Since you appear uninterested in maximizing growth that rules me out for providing any worthwhile info to you.

 Thread Tools Display Modes Linear Mode

 Posting Rules You may not post new threads You may not post replies You may not post attachments You may not edit your posts BB code is On Smilies are On [IMG] code is On HTML code is Off Forum Rules
 Forum Jump User Control Panel Private Messages Subscriptions Who's Online Search Forums Forums Home Links to Popular Forums     News, Views, and Gossip     Beginners Questions     Marketplace & Staking     Casino & Cardroom Poker     Internet Poker     NL Strategy Forums     Poker Goals & Challenges     Las Vegas Lifestyle     Sporting Events     Politics     Other Other Topics Two Plus Two     About the Forums     Two Plus Two Magazine Forum     The Two Plus Two Bonus Program     Two Plus Two Pokercast     The Best of Two Plus Two Marketplace & Staking     Commercial Marketplace     General Marketplace     Staking - Offering Stakes     Staking         Staking - Offering Stakes         Staking - Seeking Stakes         Staking - Selling Shares - Online         Staking - Selling Shares - Live         Staking Rails         Transaction Feedback & Disputes     Transaction Feedback & Disputes Coaching & Training     Coaching Advice     Cash Game Poker Coach Listings     Tournament/SNG Poker Coach Listings Poker News & Discussion     News, Views, and Gossip     Poker Goals & Challenges     Poker Beats, Brags, and Variance     That's What She Said!     Poker Legislation & PPA Discussion hosted by Rich Muny     Twitch - Watch and Discuss Live Online Poker     Televised Poker General Poker Strategy     Beginners Questions     Books and Publications     Poker Tells/Behavior, hosted by: Zachary Elwood     Poker Theory     Psychology No Limit Hold'em Strategy     Medium-High Stakes PL/NL     Micro-Small Stakes PL/NL     Medium-High Stakes Full Ring     Micro-Small Stakes Full Ring     Heads Up NL     Live Low-stakes NL Limit Texas Hold'em Strategy     Mid-High Stakes Limit     Micro-Small Stakes Limit Tournament Poker Strategy     STT Strategy     Heads Up SNG and Spin and Gos     Mid-High Stakes MTT     Small Stakes MTT     MTT Community     Tournament Events Other Poker Strategy     High Stakes PL Omaha     Small Stakes PL Omaha     Omaha/8     Stud     Draw and Other Poker Live Poker     Casino & Cardroom Poker         Venues & Communities         Regional Communities     Venues & Communities     Tournament Events         WPT.com     Home Poker     Cash Strategy     Tournament Strategy Internet Poker     Internet Poker         nj.partypoker.com         Global Poker         MPN – Microgaming Poker Network         Big Ugly Poker     Commercial Software     Software         Commercial Software         Free Software General Gambling     Backgammon Forum hosted by Bill Robertie.     Probability     Sports Betting     Other Gambling Games 2+2 Communities     Other Other Topics         OOTV         Game of Thrones     The Lounge: Discussion+Review     EDF     Las Vegas Lifestyle     BBV4Life         omg omg omg     House of Blogs Sports and Games     Sporting Events         Single-Team Season Threads         Fantasy Sports     Fantasy Sports, sponsored by Draftboard.com         Sporting Events     Wrestling     Golf     Chess and Other Board Games     Video Games         League of Legends         Hearthstone     Puzzles and Other Games Other Topics     Politics     History     Business, Finance, and Investing     Science, Math, and Philosophy     Religion, God, and Theology     Travel     Health and Fitness     Laughs or Links!     Computer Technical Help     Programming International Forums     Deutsch         BBV [German]     Français     Two Plus Two en Español

All times are GMT -4. The time now is 07:09 PM.

 Contact Us - Two Plus Two Publishing LLC - Privacy Statement - Top

Powered by vBulletin®
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
Copyright © 2008-2017, Two Plus Two Interactive