1. #1
    Waterstpub87
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    Convexity in odds



    One thing that I think many struggle with, I know that I did at the beginning, is how to understand advantages and the triggers for different systems. Through messing around, and working off of probabilities instead of odds, I began to understand this concept, which I haven't seen written about, doesnt mean I came up with it, but ive never seen it mentioned, but in my mind I always though of the term "Convexity" for.

    In the chart above, on the Y axis you have the change in implied probability for a one cent move, compared with the X Axis, which is the odds it is moving onto(for example, the very first item on the left is a move from -300 to -299, which is an implied probability of .75 (-300) to 0.74937, roughly 0.000627. We can see, compared to this, that a move from -101 to 100 is worth .0025, 4 times as much.

    This information explains a few things I've heard throughout the years. The first being that money lines are almost always lower juice than spreads. In an NFL games, you are giving up the most valuable ten cents there are in vig. If you instead give up 10 cents in the -130 (-130 on a -120/120 vig free), your loss in implied probability is .019763 as compared to 0.02381, roughly a 17% savings.

    Another point being that I always use difference in calculated vs offered probability to trigger systems. Earlier in my betting career, I would use cents. This was incorrect, as they are not all priced equally.

    Hopefully, especially for newer bettors, they can use this information to save themselves some vig, and have a better idea of how to measure an edge.
    Last edited by Waterstpub87; 06-09-21 at 07:18 PM.
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  2. #2
    Gaze73
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    So you're saying we should bet ML instead of spreads? I don't like betting teams at -200

  3. #3
    Waterstpub87
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    Quote Originally Posted by Gaze73 View Post
    So you're saying we should bet ML instead of spreads? I don't like betting teams at -200
    It depends how many cents they charge at -200 hundred. Seems like if it's less than 20, yes.

  4. #4
    KVB
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    Quote Originally Posted by Waterstpub87 View Post
    ...Another point being that I always use difference in calculated vs offered probability to trigger systems. Earlier in my betting career, I would use cents. This was incorrect, as they are not all priced equally...
    Easily the most important lesson in the original post.

    Always convert, cents and points are not priced equally. It's that conversion rate and "current" push rates that help many of us keep a profitable advantage.

    By current I mean using a formula, if you will, to derive push rates using a little more recent events with more weight as those rates do ebb and flow.

    Good post Waterst, I have avoided posting the values of points and of cents as the moneylines increases as I believe it's a big part of my edge.

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  5. #5
    d2bets
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    Yes, it's more accurate think of odds in terms of probabilities. But I'm not sure about the conclusion to bet ML's. Usually the books just use larger spreads at higher ML's to make up foe the difference. So while you'll see see 20 cents -110/-110 standard, you are probably not going to find a book with -220/+200 ML. Usually they offer more like +180/-220. Of course you might be able to narrow that a lot with line shopping.

    This is why I laugh when I see odds boost from like +750 to +800. Wow 50 cents! Yeah, not really. +100 to +150 is significant; +750 to +800 is not.
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  6. #6
    Waterstpub87
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    Quote Originally Posted by d2bets View Post
    Yes, it's more accurate think of odds in terms of probabilities. But I'm not sure about the conclusion to bet ML's. Usually the books just use larger spreads at higher ML's to make up foe the difference. So while you'll see see 20 cents -110/-110 standard, you are probably not going to find a book with -220/+200 ML. Usually they offer more like +180/-220. Of course you might be able to narrow that a lot with line shopping.

    This is why I laugh when I see odds boost from like +750 to +800. Wow 50 cents! Yeah, not really. +100 to +150 is significant; +750 to +800 is not.
    Not a definite all the time. For example, NFL -3 at -110, might be less of a good deal than -160?, what ever they normally price it at. I tend to bet NFL spreads, but this year, going focus more on money lines because of this.

  7. #7
    TheGoldenGoose
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    Odds - Probability = True Value

  8. #8
    d2bets
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    Quote Originally Posted by Waterstpub87 View Post
    Not a definite all the time. For example, NFL -3 at -110, might be less of a good deal than -160?, what ever they normally price it at. I tend to bet NFL spreads, but this year, going focus more on money lines because of this.
    Just depends on the variety of lines you have access to. You can also usually find more reduced juice on spreads. But again, you have to survey the entire marke of lines you have access to, not just one book in isolation. If you have a handful or more books and you find the best on each side, your true juice is usually pretty low.
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  9. #9
    TheGoldenGoose
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    Odds - Probability = True Value

    Anybody agree or disagree???

  10. #10
    d2bets
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    Quote Originally Posted by TheGoldenGoose View Post
    Odds - Probability = True Value

    Anybody agree or disagree???
    In other words, the difference between the actual probability and the offered probability. Trick is knowing what the correct probability actually is.
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