Hedge Help

[bfour]

I have a future on the Super Bowl matchup being Green Bay versus Pittsburgh. The odds are 25/1 for what I'll call 1 unit. Is it possible to hedge this in order to maximize my profit?

[forsberg21]

Of course, but you gotta wait until the NYJ/NE game finishes. This can be done.

Remind me by PM and I'll give you my analysis when they release the odds for the next games.

[bfour]

Right on man

[Blax0r]

Just to make sure; did you mean "lock-in" your profit instead? Hedging (or not) for "maximum profit" can be done anytime, but is far more difficult.

[bfour]

Well I guess what I meant by saying that is that I've never hedged something like that and I don't want to screw myself.

[forsberg21]

Ok buddy, I think I've figured this out for ya...

The first thing you do is wager 7 units on Chicago. You can get them for 2.62 at Pinny right now. Here are the 2 scenarios:

1. Chicago Wins: your first wager is toast, end your hedge, collect your winnings on Chicago
- Winnings: 7 units x 2.62 = 18.34 units. Total profit: 18.34 units collected - 1 unit (initial) - 7 units (wager) = 10.34 units

2. Chicago Losses: your first wager is still good, bet the NYJ to win now.

Betting on NYJ, wager 10 units on NYJ for 2.65 at Pinny, here are the 2 scenarios:

1. NYJ win, your first wager is toast, collect your winnings.
- Winnings: 10 units x 2.65 = 26.5 units. Total profit: 26.5 units - 1 unit (initial) - 7 units (CHi loss) - 10 units (wager) = 8.5 units
2. NYJ lose, your first wager automatically wins, GB vs. PIT in Superbowl, collect 26 units.
- Winnings: 26 units. Total profit: 26 units - 1 unit (initial) - 7 units (CHI loss) - 10 units (NYJ loss) = 8 units

So by hedging, you guarantee yourself anywhere from 8 to 10.34 units.

[Blax0r]

There is the possibility that 1) the two games overlap each other and 2) the CHI/GB game is close at the end, making the previous hedge strategy difficult to execute (but if you foresee that these two conditions, especially #2, won't be met, I would support forsberg's strategy).

There are two alternatives that would lock-in your profit right now without requiring any further action from you on game day.

1. Given betfair's odds for the other possible super bowl matchups, you should lay the following:
-7.34 units on Jets/GB (+255)
-7.24 units on PIT/CHI (+260)
-5.11 units on Jets/CHI (+410)

You'll finish with 5.37 units net.

2. Given Betfair's odds for the ML on Jets and CHI, you should lay the following:
-9.8 units on CHI (+165)
-9.43 units on Jets (+176)

You'll take home 5.77 units minimum, but have a chance to win both of the listed bets and win 31 units.

Regardless though, you're in an enviable position.

[bfour]

Good stuff fellas, I have some time to choose what direction I go in, and it's also to my advantage that the lines are headed in my favor. Think tank is the best.

Would you ever suggest sticking with the bet since the 2 teams are favored?

[_zofo_]

I have been in this same situation before in previous years. Well thought out scenerios. Thanks for the info.

[forsberg21]

Good stuff fellas, I have some time to choose what direction I go in, and it's also to my advantage that the lines are headed in my favor. Think tank is the best. Would you ever suggest sticking with the bet since the 2 teams are favored?

I have no idea on that one buddy, at that point you'd be capping. You could either take the guaranteed 8-10 units, or risk it for a profit of 25 units, it all depends on your personality here.

[specialronnie29]

horrible odds to begin with

now bet is worth even less if you hedge it

if you're going to gamble then gamble for christs sake

[forsberg21]

horrible odds to begin with

now bet is worth even less if you hedge it

if you're going to gamble then gamble for christs sake

Thanks for the constructive input, your contribution is appreciated.

[byronbb]

If someone was offering you 25-1 on the packers to win the superbowl right now, you would be putting more than 1 unit on it.

[LLXC]

What about GB Not to win SB at -195?

Assuming you put 1 unit to win 25 units.

Profit: 7.81 units by wagering 17.19 units on NO.

Simpler but not as profitable.

[specialronnie29]

Thanks for the constructive input, your contribution is appreciated.

it actually is constructive

i said not to hedge it to maximize EV

here you are encouraging the guy to throw money away because he is too scared to let his bet ride

[specialronnie29]

Ok buddy, I think I've figured this out for ya...

The first thing you do is wager 7 units on Chicago. You can get them for 2.62 at Pinny right now. Here are the 2 scenarios:

1. Chicago Wins: your first wager is toast, end your hedge, collect your winnings on Chicago
- Winnings: 7 units x 2.62 = 18.34 units. Total profit: 18.34 units collected - 1 unit (initial) - 7 units (wager) = 10.34 units

2. Chicago Losses: your first wager is still good, bet the NYJ to win now.

Betting on NYJ, wager 10 units on NYJ for 2.65 at Pinny, here are the 2 scenarios:

1. NYJ win, your first wager is toast, collect your winnings.
- Winnings: 10 units x 2.65 = 26.5 units. Total profit: 26.5 units - 1 unit (initial) - 7 units (CHi loss) - 10 units (wager) = 8.5 units
2. NYJ lose, your first wager automatically wins, GB vs. PIT in Superbowl, collect 26 units.
- Winnings: 26 units. Total profit: 26 units - 1 unit (initial) - 7 units (CHI loss) - 10 units (NYJ loss) = 8 units

So by hedging, you guarantee yourself anywhere from 8 to 10.34 units.

and if he lets it ride his expected value is 10.6 units given current moneylines. sounds good given he only makes 10.34 units on yours if the underdog bears win

but thanks for your contribution

[forsberg21]

and if he lets it ride his expected value is 10.6 units given current moneylines. sounds good given he only makes 10.34 units on yours if the underdog bears win

but thanks for your contribution

Show us your calculation of expected value based on current moneylines sir.

[forsberg21]

Ronnie, I ran the numbers and I got just about the same thing. The slight loss in expected value can be thought of as the cost of hedging.

This poster asked about the hedging possibilities on his wager and that's what I provided to him. I don't understand why you came in here and posted what you did. Regardless, me, personally, I would hedge this. I would take the guaranteed 8-10.34 units, especially if my "unit" was anything over $100.

[specialronnie29]

Show us your calculation of expected value based on current moneylines sir.

are you serious?

i used no vig moneylines from pinnacle so -184 on packers and -190 on steelers

[specialronnie29]

he asked about maximizing profits.., sure you provided him a formula which is fine

but he obviously hasnt been around a long time so it would be prudent to remind him that hedging comes at substantial cost