To hedge or not to hedge, here is the math and why hedging is a bad idea....

Simple answer which I have said over 20 times in this thread, including the first post (go read it again).

You have to pay a tax to hedge.  So it is stupid to hedge unless something has fundamentally changed about that bet that makes it less than the EV that you would have to pay in vig to get out of it. 

In simple terms, if something has fundamentally changed about that bet that makes it less than say a 40% EV winner, then hedging makes sense.

If not, you are not guaranteeing yourself anything except less money than you deserve.  Period.

hell I respect the hell out of MIT and Ivy league PHDs and graduates and Authors my friend.

especially the ones that I have hired to work for me over the years.

 

No need to be a dick Van.  I have not insulted you... no reason to try and insult me....

Somebody sees the light.

and thats it...the EV is the major unknown in this theory...and it is a theory.

the calculated EV of the Niners -3.5 last night could have been 60% yet they could have lost ATS 5 times in a row with the same EV going in each time

the hedge is always an EV of 100%

this is a very tough thing for people to change their thought process on...and i'm proof positive. too much training in the trading/investing world to never not take profits when i can get them as long as its at or above my expected ROI

KOAJ--- you and I are on the same page... no matter how you or I try to explain it, Van and his group of followers don't appreciate it... I never go into a bet thinking I will lose but if the opportunity presents itself where I can guarantee money, I will give it serious consideration and based on the factors I mentioned earlier, I may hedge....

TSW--The comment by me that prompted that response was in response to Van saying to roll it ALL into the 4th game.... please read all comments in context.....if you roll it all and lose, you win nothing....

"as long as its at or above my expected ROI"

 

Your parlay outcome should reflect this so a hedge is not necessary.

 

I didn't read through the whole thread, just the first post. I'm amazed how many times I see people do this and it annoys the hell out of me. I won't even parlay games with starting times over three hours apart because there's no need to do it. If I want to parlay 5 teams on Saturday and the starting times are 1pm, 1:30pm, 2pm, 2:30pm, and 9pm then I'll do a 4 teamer with the 1p, 1:30pm, 2pm, and 2:30pm  games and deal with the 9pm game later but most people like to bet the 5 team parlay and freak out about hedging after the first four hit. Time staggered parlays are a big no no unless you're sure that you want to ride it out. People shouldn't even make hedging their parlays an option but 90% of the people do it. It makes no sense to me either.

Vanzack, great post. You're 100% correct.

Koaj - if you are getting underpaid to take your profits, you are doing yourself a disservice.

Its funny that you call yourself a grinder / trader - but yet you are absolutely willing to let yourself get shortchanged in order to get "guaranteed money".  I would think that a grinder / trader would calculate what his breakeven point for EV on the last wager is before deciding to do it.  I would be willing to bet that you would be shocked that the last game would have to be in the 20%'s to make your breakeven point worth hedging, but this analysis never enters your thought process.

In the end, do what you want.  But you are giving away money.

Its like you are willing to take far less than your position deserves, and that is OK with you because you make money doing it.  I will try one more example before I quit:

You bet dont pass on the craps table.  A 4 is the comeout roll.  You now have a 2-1 chance of winning your even money bet for 10 bucks.  Before the next roll, the dealer offers you 3 bucks plus your original 10 back.  You, as the grinder and devilfan as the "guarandamnteed" type of guys you are, would take the 3 bucks as guaranteed profit.  But what you failed to analyze was that you were just paid far less for your position than you should have been paid, and that when you do this 10 times you now have significantly less money than if you never took the deal.

It is the same with hedging.  You have to pay a tax to do it.  It is identical to the craps example above.  It has nothing to do with your personality.  It has nothing to do with your risk tolerance.  It only has to do with math, and it is not an argument, it is fact.

And I cant believe that 4 hours later we are still debating mathematics.

And for the people skimming, this is the most important statement in the whole thread:

 

I understand your frustration.

It must be hard to not have the capability to understand what is being said here.  I wish, for your own sake, that you would just take some time and think about it.

Taking 3 bucks instead of 10 at the craps table in my above example guarantees you money, but you are being grossly underpaid to take the guarantee.

This is the part you dont understand.  They are not paying you what you deserve for your position.  Its math. 

 Its not debatable, just obviously not comprehendable for you.

OK, so I am assuming that you would take the 3 dollars offered to you.

Would you take 1 dollar?  Would you take 10 cents?

You should be getting paid 6.66, but you are willing to take 3 dollars.  Im curious as to the lowest you would take, and if there is a cutoff why the arbitrary cutoff?  It stands to reason that you would take ANY offer as long as it was "guarandamnteed".

You dont seem to care how much they are stealing from you, just as long as they give you something.  Kind of like the fallacy of "playing with house money", you are an obvious victim of psychological mindfuck.

Please answer the questions above.

im no mathematician but i do like discussing theory and learning. i dont play casino games so that example doesnt fly with me...i find them boring

i guess at this point we agree to disagree. i know that in theory i am leaving money on the table by hedging...my main issue is that the last leg of a parlay is never a guaranteed profit regardless of the expected value. a hedge is always a guaranteed profit.

the above is without regard to fundamental changes in the game, players, etc

you know whats funny...i havent hedged a parlay in probably 6-7 years. i dont even play them