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Arbitrage Opportunity?
Kobe Bryant to be Finals MVP -163
Celtics to win the championship +177
Is the risk worth more or less than the payout?
What is the value of the risk? Can it be accurately quantified?
Possibility of winning both?
I thought it looked intriguing and wanted to get some opinions.
IF it plays out like you would want your profit is only 1.95% and you also have the chance of losing both(celtics lose and by some fluke gasol or fisher win MVP)...Just depends on what your risk tolerance is.
Also, I think you have a 0% chance of winning both...imo. Gl to whatever you choose.
If you bet this such that you profit the same whether Boston won the series or Kobe won the MVP (but not both) then just as AAO has said you'd win 1.9594% of your wager amount.Originally Posted by Bullajami
This is akin to placing a bet at money line odds of roughly .
You can't take just take two -EV bets and by straight betting them simultaneously transform them into a +EV bet.
So really what you're saying is that you believe that the line on at least one of these two bets has been mispriced. (If you could identify which line you believed mispriced then proper Kelly strategy might still dictate a bet on the other market as a hedge.)
So at this point, Bullajami, the question I'd pose to you would be which of the lines do you believe to be mispriced and why? Realize of of course that this is a rhetorical question. I'm not asking because I want an answer, but rather this is what you would need to ask yourself before seriously considering taking this bet. While the short odds on the aggregate wager do imply a fairly likely victory (and hence a low outcome standard deviation), they do not by themselves imply positive expectation.
Ganch,
1. What formula did you use to figure out the money line odds of the bet?.
2.To me, I dont think he really thinks one of the lines is off. It sounds like he is just trying to make money (wheather it has value or not is not his concern). So in this case if he just wanted to make a little money reguardless of value, he would take the bet both sides as you described.
He'd be betting 1 unit to win 1.9594% units. That'd be decimal odds of about 1 + 1.9594% ≈ 1.09594 or US odds of about -100 / 1.9504% ≈ -5103.6.
Generally speaking, the optimal strategy for one "just trying to make money" would be to fully abstain from placing any wagers at lines that hold no value (hedging aside).
I dont quite agree with this statment. If you have a line that should be at +150 and is instead at +125 and the other side is -110, You would still arb this line just to make money.
In which case he'd necessarily believe one of the lines (the -110) held value ... he'd be betting on the other side (the +125) as a hedge.
If he were a full-Kelly bettor (unconstrained either by betting limits or time-value-of-money) he'd optimally bet 60% of bankroll at -110 and 40% of bankroll at +125.
The point is that when confronted with a set of bets with mutually dependent outcomes you need to believe at least one of them is +EV to make any bet on the underlying worthwhile. Now certainly you might not know exactly which bet (or bets) holds the value, but you'd need to believe that at least one of them did or else you'd just be throwing away money.
No.
That line could be -120 instead of -110 and I'm sure he would not believe the line held value, just in the bet itself because there would be no value in either line, just him trying to make money.
"Beauty is in the eye of the beholder"
Ganch,
Overall I wish the guy would just come in here so we could stop talking hypothethicals.
But there would be value in the -120 ... there'd be EV of 1.8519%. I'm not understanding what you're trying to say.
Are you perhaps suggesting that the only value for your hypothetical bettor is in a guaranteed profit?
Yes...that is what Im trying to say.
OK.
The problem is of course (just as you pointed out in the second post of this thread) that that simply isn't applicable in this betting scenario.
For the OP's aggregate bets to be +EV one or the other of the two underlying events would need to occur with probability > 1 ≈ 98.078% (double counting the probabiliry of winning both simultaneously).
I posted and then went to bed.
First, I have not bet either, nor do I intend to at his time. 1.95% profit with some risk of losing both bets ain't my bag, baby.
Basically AAO is correct, I have no interest in the underlying value of either proposition. Frankly, I don't like NBA basketball all that much and am unlikely to watch much of the finals. (Except that I will be in Vegas from 4-13 June, and the finals are sure to be on center screen in the sportsbooks.)
I just thought the numbers looked interesting, and wondered what folks thought of my angle of correlating these events for an arbitrage opportunity. Something that would normally be very risky, but here seems like a 98%+ correlation (SWAG).
I actually think winning both is more likely than losing both. There's no way that the Lakers win if Kobe is not playing to MVP standards. Likewise, I think he could put on an unbelievable display in a losing effort - a losing effort that requires lots of teamwork by the Celtics. I think the MVP has only gone to a player who lost the series once in the past, but it IS possible.
But, as we all know - anything can happen!
If you don't have any interest in the underlying value of either proposition then your choice is clear. Bet nothing.
The only way to obtain excess expected value from correlated bets would be to parlay them (although FWIW, not in this case insofar as the two bets are actually negatively correlated.) Straight bets do you no good whatsoever (hedge value aside). You can't just manufacture +EV by straight betting two -EV mutually dependent wagers. There's no "angle" to that.
The only way for the aggregate bet to have value would be if one or more of the two underlying bets had value. If you're not prepared to confront the question of which bet you believe to be +EV, then you shouldn't be considering the aggregate bet.
It doesn't matter how correlated (positively or negatively) the aggregate bet might be. All else being equal this correlation will not impact your EV in the slightest. If neither constituent bet holds value then neither will the aggregate. The correlation provides absolutely no EV benefit.
Ganch,
Its not about the value. Please observe that some guys dont even know what value is. You have people that bet on thier favorite sports team, or pay -210 for a team simply because "they think it will win"(and hope for the best) or in this case because he would get guarenteed profit... Value betting is a style of betting, and not necessarily something everyone takes into account when wagering.
If a sports bettor doesn't know what value is he's either a losing sports bettor or a lucky sports bettor.
Other than as a cautionary tale and as a means of identifying exploitable structural inefficiencies within the market, the mode of thought you've outlined is of no relevance within the Think Tank.
This is not supposed to be a forum for the discussion of recreational betting (that's what Player's Talk is for), but rather a moderated forum for advantage bettors to seriously discuss advantage betting and topics related thereto, as well as for recreational bettor to learn how to develop an advantage.
If a bettor wanted to ignore value and only wager on his favorite sports team regardless of price, or based solely on gut feeling, or because he imagined "guaranteed" profit without thought to the underlying value, that would certainly be his right and I'd wish him nothing but the best of luck.
It's just that it wouldn't be worthy of any serious discussion within this forum.
That was pretty much the underlying original question - could the two bets I posted have been considered a market inefficiency?
Its all moot now, of course. Thanks for your time on this.
I wouldn't think so.
Remember ... for the two lines to have been +EV in aggregate would mean that one or the other (or both) would have had to have been +EV in isolation.
Untrue in general. Consider the following two betting props (stakes not held):
1) Humans make contact with an extraterrestrial intelligence in 2008, odds 10000/1; &
2) Humans don't make contact with an extraterrestrial intelligence in 2008, odds 1/5000
I don't have much idea which is the value, but I'm sure there's value in the aggregate.
I think you're reading too deeply into what's really a very shallow and uncontroversial point.
I'm not claiming that an advantage bettor always needs to know which side of a statistically arbitragable market holds value, but only that he should be prepared to confront the question in order to assure himself that real opportunity exists. This is decidedly less important in the case of a true arbitrage, such as in the example you gave, where value can be immediately and unquestionably deduced from the pricing.
As I wrote in an earlier post in this thread, "Now certainly you might not know exactly which bet (or bets) holds the value, but you'd need to believe that at least one of them did or else you'd just be throwing away money." That's all I'm saying.
The point I was trying to get across is that in the OP's original question, at least one side or the other would need to hold value for the aggregate bet to hold value. I had gotten the impression that the OP and perhaps also an earlier contributor to this thread were of the clearly mistaken belief that by placing the two bets together the aggregate position could potentially be +EV even if the constituent bets were -EV in isolation.
Can we call a moratorium on busting Ganch's balls just for the sake of it? Seriously, we knew what he was saying and we knew it was accurate.
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