Would you hedge? Want some opinions here

[The Giant]

Jtoler and brooks, if you were betting don't pass on the craps table for $100 and the point was 4, would you let someone buy your bet from you for $125? It's guaranteed plus money and you don't have to worry about the 4 being rolled

It's like in a poker tournament where only first-place pays, and you get down to the last two guys, and you have a 3-2 chip advantage, and you agree to share the prize.

It might be nice to add to your bankroll, but over the long haul, you're losing money.

[TheCentaur]

Again youre talking extreme measures when I said always hedge I didnt mean in every literal circumstance. The OP presemted his parlays many clueless people said let it ride when it was obvious to hedge.

Why is it extreme? Any hedge opportunity I can show you why it is long term a losing money strategy unless that hedge bet is +ev on its own

Haven't you ever heard the saying "no combination of -ev bets creates a +ev "

[TheCentaur]

It's like in a poker tournament where only first-place pays, and you get down to the last two guys, and you have a 3-2 chip advantage, and you agree to share the prize.

It might be nice to add to your bankroll, but over the long haul, you're losing money.

Jtoler is that an extreme example?

[jtoler]

Jtoler is that an extreme example?

Perhaps not an accurate example, what poker tourney is winner takes all, thats a losing proposition before you sit down, are we talking sit-n-go's here. Anyway this thread started with the OP's bets, should he not have hedged? Even he realized he should have when he posted at halftime, lesson learned. But his first mistake was putting the same team in more than one parlay, dont ever do that.

[TheCentaur]

Perhaps not an accurate example, what poker tourney is winner takes all

unreal

Giant he must be messing with us

[jtoler]

unreal

Giant he must be messing with us

Fine lets answer his question which is full of unknowns. It would depend on the buy-in and the amount to win, either way the logical thing to do is split the pot, its common sense, no math is needed, we can do the math lessons if you want too though, like I said Ive had enough to last me awhile.

[KVB]

unreal

Giant he must be messing with us

Guys are always trying to find ways to not be along term winner, most are good at it.

[jtoler]

Guys are always trying to find ways to not be along term winner, most are good at it.

Your way is a guaranteed long term losing way and zero bankroll.

[thunderous]

This is how you hedge

[TheCentaur]

Fine lets answer his question which is full of unknowns. It would depend on the buy-in and the amount to win, either way the logical thing to do is split the pot, its common sense, no math is needed,

Ok that's what I needed to know. Splitting the pot is common sense? No. You have the chip advantage

If the 1st place prize is $1000 and you have a 3 to 2 chip lead

3 times you win 1000 and 2 times you win nothing (+3000)

or

5 times you win 500 (+2500)

It's simple

I realize in poker a 3 to 2 chip lead is not necessarily an advantage of 3:2, but it is most definitely and advantage.

Lets say it is less of an advantage, say 6:5

6 times you win 1000 and 5 times nothing (+6000)

or

11 times you win 500 (+5500)

As long as you can admit having a 3 to 2 chip lead is an advantage, it is obvious hedging costs you money

Also, there are plenty of 1 table sit n gos that only pay the winner

[jtoler]

Ok that's what I needed to know. Splitting the pot is common sense? No. You have the chip advantage

If the 1st place prize is $1000 and you have a 3 to 2 chip lead

3 times you win 1000 and 2 times you win nothing (+3000)

or

5 times you win 500 (+2500)

It's simple

I realize in poker a 3 to 2 chip lead is not necessarily an advantage of 3:2, but it is most definitely and advantage.

Lets say it is less of an advantage, say 6:5

6 times you win 1000 and 5 times nothing (+6000)

or

11 times you win 500 (+5500)

As long as you can admit having a 3 to 2 chip lead is an advantage, it is obvious hedging costs you money

Also, there are plenty of 1 table sit n gos that only pay the winner

Like I said you dont need math for such, all is needed is common sense, doesnt matter if you have a 5/1 chip lead. You and many have a gambling mentality, thats fine, so do I at times. Those numbers you posted are meaningless and useless in regards to poker, lets say its no-limit, too many variables. Youre having the mentality like the OP, as if you cant lose. That mentality will have you reloading at the book eventually. You cant put odds on your 3/2 chip stack going forward, you dont know what will happen. Like this missed hedged opportunity, you can win some money or give money away, not even break even, but instead, reach into your pocket and give money away.

[KVB]

Sometimes it is just plain limited ability that causes a bettor to never win in the long term, always giving birth and seeing the death of bankrolls.

[TheCentaur]

Like I said you dont need math for such, all is needed is common sense, doesnt matter if you have a 5/1 chip lead.

Ridiculous

Carry on

[jtoler]

Ridiculous

Carry on

Curiously you never answered my question, should the OP have hedged tonight?

[The Giant]

Curiously you never answered my question, should the OP have hedged tonight?

If Miami had won tonight, would that have meant your entire argument would have been wrong?

Quit being shortsighted.

[jtoler]

If Miami had won tonight, would that have meant your entire argument would have been wrong?

Quit being shortsighted.

Of course it wouldnt have been wrong. You used the key word which is the word that should be used before the game even starts...IF. Win or lose, hedge in this scenario.

[TheCentaur]

Curiously you never answered my question, should the OP have hedged tonight?

I'm not continuing a discussion with someone who doesn't accept that 2+2=4

No big deal jtoler, do what you want and good luck in the future

[jtoler]

I'm not continuing a discussion with someone who doesn't accept that 2+2=4

No big deal jtoler, do what you want and good luck in the future

Hilarious, cant admit when youre wrong, its all good.

[TheCentaur]

Hilarious, cant admit when youre wrong, its all good.

How am I wrong

I give you logical and mathematical evidence to prove what i'm saying and all you do is reject it because it isn't exactly like the OP's parlay or say "See, he lost therefore he should have hedged."

Please list for me concrete reasons why hedging here is better than not hedging

[Kermit]

When I started betting and playing parlays back in the mid 90's, a friend who got me started said "If you ever hedge because you are scared, just make sure you only hedge to win your initial bet back, that way you won't lose anything"

[Plaza23]

What do you guys do?

$70 to win $80 in a 3 team parlay.
1st two legs win.

Possible outcomes with no hedging: either +80 or -70
Possible outcomes with hedging: +45 or 0 or a guarantee of +26

In my opinion, you should still hedge in this situation.

Here's why: Say the chances of hitting that 3rd leg is 60%.

Expected value of that would then be (60% * 80 )+ (40% * (-70) = $20.

If the expected value of letting it ride is $20, and I can guarantee $26. Take the arbitrage.

[TheCentaur]

What do you guys do?

$70 to win $80 in a 3 team parlay.
1st two legs win.

Possible outcomes with no hedging: either +80 or -70
Possible outcomes with hedging: +45 or 0 or a guarantee of +26

In my opinion, you should still hedge in this situation.

Here's why: Say the chances of hitting that 3rd leg is 60%.

Expected value of that would then be (60% * 80 )+ (40% * (-70) = $20.

If the expected value of letting it ride is $20, and I can guarantee $26. Take the arbitrage.

explain to me the bet that guarantees $26

[jtoler]

How am I wrong

I give you logical and mathematical evidence to prove what i'm saying and all you do is reject it because it isn't exactly like the OP's parlay or say "See, he lost therefore he should have hedged."

Please list for me concrete reasons why hedging here is better than not hedging

Well you were equating chip ratios to win ratios which is only hypothetical.

[Martinr]

My 10 cents worth.

My 10 cents:
The OP is a parlay bettor, not a trader. He probably likes the rush of winning a large amount for a relatively small outlay, and having that live leg at the end is his aim. There's nothing really wrong with that for a recreational punter. He'll have his hits and misses, and he probably isn't interested in the maths involved with the multiplying juice, which makes parlays such a bad proposition for long term so-called professionals.
He should probably only hedge when things like team changes/injuries make his bet a different proposition than when he placed it.
Hedging shouldn't be a will I/won't I decision for parlay bettors when they only have one game left in the parlay to hit, and when they only want to hedge because the amount at stake is beyond their comfort zone. By doing so they are actually playing into the bookmaker's hand, and it defeats the purpose of the parlay.
Reading the above posts, there are quite a few who disagree with this thinking. Hedging parlays is a topic that often comes up though, and it's one that I'm interested in from a psychological viewpoint. I've been in the position myself where I've had to decide whether to hedge a parlay or not, and the contradicting forces at work when making the decision say a lot about the gambler's psyche (my psyche).
There is of course a form of betting that solely relies on hedging. It's called trading, which in short involves backing something at a high price, and laying it at a lower price. I'm not sure if North American bettors use betting exchanges, such as Betfair, but this type of trading can also be used at regular sports books. An example would have been backing Spurs to win the series after Game 2 at + odds, and then hedging the bet now. A trader places the first bet WITH EVERY INTENTION of laying off the bet at a certain time.
A punter can be both a trader and a gambler, but NOT AT THE SAME TIME. If he places a parlay as a gambler, then he should play it through as a gambler.
If he places a parlay as a trading strategy, then he should trade out every time, even if it means losing a portion of the original stake. He shouldn't change strategy halfway through, because he will end up confused, indecisive, chasing his tail, and in the long term it will likely be detrimental to his mental state and his bankroll.

[Plaza23]

explain to me the bet that guarantees $26

I usually play parlays on baseball.
I play the +2.5 lines.

For instance June 5th, I played this 3 team parlay:
SF Giants +2.5 -500
Oakland +2.5 -255
STL +2.5 -425

$40 to win $42.55

SF and Oakland both won. St Louis was playing Kansas City.
I hedged Kansas City at -2.5 (+345). $17 to win $60.

So I guaranteed myself either $20 (if Kansas City won) or $25.55 if St Louis won.

Thats the type of hedging I'm talking about when I think its a good idea to hedge. But, if you are going to always hedge if you win the first 2 legs, its better to just play the 1st two legs as a parlay and dont worry about the 3rd game.

[jtoler]

My 10 cents:
The OP is a parlay bettor, not a trader. He probably likes the rush of winning a large amount for a relatively small outlay, and having that live leg at the end is his aim. There's nothing really wrong with that for a recreational punter. He'll have his hits and misses, and he probably isn't interested in the maths involved with the multiplying juice, which makes parlays such a bad proposition for long term so-called professionals.
He should probably only hedge when things like team changes/injuries make his bet a different proposition than when he placed it.
Hedging shouldn't be a will I/won't I decision for parlay bettors when they only have one game left in the parlay to hit, and when they only want to hedge because the amount at stake is beyond their comfort zone. By doing so they are actually playing into the bookmaker's hand, and it defeats the purpose of the parlay.
Reading the above posts, there are quite a few who disagree with this thinking. Hedging parlays is a topic that often comes up though, and it's one that I'm interested in from a psychological viewpoint. I've been in the position myself where I've had to decide whether to hedge a parlay or not, and the contradicting forces at work when making the decision say a lot about the gambler's psyche (my psyche).
There is of course a form of betting that solely relies on hedging. It's called trading, which in short involves backing something at a high price, and laying it at a lower price. I'm not sure if North American bettors use betting exchanges, such as Betfair, but this type of trading can also be used at regular sports books. An example would have been backing Spurs to win the series after Game 2 at + odds, and then hedging the bet now. A trader places the first bet WITH EVERY INTENTION of laying off the bet at a certain time.
A punter can be both a trader and a gambler, but NOT AT THE SAME TIME. If he places a parlay as a gambler, then he should play it through as a gambler.
If he places a parlay as a trading strategy, then he should trade out every time, even if it means losing a portion of the original stake. He shouldn't change strategy halfway through, because he will end up confused, indecisive, chasing his tail, and in the long term it will likely be detrimental to his mental state and his bankroll.

Can tell youre European by the first few sentences, alot of European traders at a forum I go to, trading is all they do, its a long term mature mindset void of any gambling rush and it makes decisions simple which really become only one decision. When I first started I was, as Im sure all gamblers are, met with the the strong urge to see the bet out, there is only one reason why such wallows in the mind and the short answer is greed. I had to root out and change that mindset.

[TheCentaur]

I usually play parlays on baseball.
I play the +2.5 lines.

For instance June 5th, I played this 3 team parlay:
SF Giants +2.5 -500
Oakland +2.5 -255
STL +2.5 -425

$40 to win $42.55

SF and Oakland both won. St Louis was playing Kansas City.
I hedged Kansas City at -2.5 (+345). $17 to win $60.

So I guaranteed myself either $20 (if Kansas City won) or $25.55 if St Louis won.

Thats the type of hedging I'm talking about when I think its a good idea to hedge. But, if you are going to always hedge if you win the first 2 legs, its better to just play the 1st two legs as a parlay and dont worry about the 3rd game.

Ok good, let's look at the math

Lets say the true odds for KC -2.5 are somewhere between -345 and -425, let's say -375

We run this scenario 475 times hedging, and 475 not hedging

Not hedging:

375(STL +2.5 winning) x $42.55 - 100 x $40(losing original stake)= $11,956

Hedging:

375(STL +2.5) x $25.55 + 100(KC -2.5 wins) x $18.65($17 x 3.45 - $40 original stake) = $11,446

Not hedging in this example makes you $510 more over 475 events than hedging, which translates to about $1.07 more per parlay or 2.68%($1.07/$40)

If 2.68% doesn't sound like that much to you, casinos across the world would strongly disagree

[Plaza23]

Ok good, let's look at the math

Lets say the true odds for KC -2.5 are somewhere between -345 and -425, let's say -375

We run this scenario 475 times hedging, and 475 not hedging

Not hedging:

375(STL +2.5 winning) x $42.55 - 100 x $40(losing original stake)= $11,956

Hedging:

375(STL +2.5) x $25.55 + 100(KC -2.5 wins) x $18.65($17 x 3.45 - $40 original stake) = $11,446

Not hedging in this example makes you $510 more over 475 events than hedging, which translates to about $1.07 more per parlay or 2.68%($1.07/$40)

If 2.68% doesn't sound like that much to you, casinos across the world would strongly disagree

I understand the point you are trying to make, but to alot of bettors that are only playing with a certain amount of roll - they want to be able to lock in money and just build upon the amount they initially put into their accounts. They dont have enough of a roll to ride the wave of long term benefits (of not hedging) because if you dont have much in the bank, and you catch a streak of losing these parlays when you could be hedging and locking in winnings (or at the very least not losing), you can go broke quick.

[TheCentaur]

I understand the point you are trying to make, but to alot of bettors that are only playing with a certain amount of roll - they want to be able to lock in money and just build upon the amount they initially put into their accounts. They dont have enough of a roll to ride the wave of long term benefits (of not hedging) because if you dont have much in the bank, and you catch a streak of losing these parlays when you could be hedging and locking in winnings (or at the very least not losing), you can go broke quick.

If their bankroll can't handle not winning the parlay then they are betting too much on it, and as far as riding the wave of long term benefits...if we are using your parlay as an example this situation isn't a rare occurrence. More than half the time you bet this parlay you will be in this position of winning or losing based on the last leg.

Also, I highly doubt many bettors have much more than a 5% advantage on these bets, so hedging like you did in your example wipes out over half the adv.

[amolg24]

Lots of people have some good insight out here...the debate will continue whether or not hedging is the best strategy for parlays...it surely is the safer option and you can avoid a lot of big swings by doing it. It will end up being personal preference though and the gamblers with let it ride most of the time and the investors will usually hedge. Another good point was that whatever you are doing, its important to be consistent because if you are changing it up each time and not basing it on any factors, the mind games of parlays and whether or not to hedge will burden anyone.

[daneblazer]

Ok good, let's look at the math

Lets say the true odds for KC -2.5 are somewhere between -345 and -425, let's say -375

We run this scenario 475 times hedging, and 475 not hedging

Not hedging:

375(STL +2.5 winning) x $42.55 - 100 x $40(losing original stake)= $11,956

Hedging:

375(STL +2.5) x $25.55 + 100(KC -2.5 wins) x $18.65($17 x 3.45 - $40 original stake) = $11,446

Not hedging in this example makes you $510 more over 475 events than hedging, which translates to about $1.07 more per parlay or 2.68%($1.07/$40)

If 2.68% doesn't sound like that much to you, casinos across the world would strongly disagree

You also have to consider the amount of times the parlay loses before it makes it to the 3rd leg, which is something that seems to be lost here.

[daneblazer]

Hedging parlays is a topic that often comes up though, and it's one that I'm interested in from a psychological viewpoint. I've been in the position myself where I've had to decide whether to hedge a parlay or not, and the contradicting forces at work when making the decision say a lot about the gambler's psyche (my psyche).

It's loss aversion. Humans are genetically programmed to limit loss. We remember our losses much more vividly than our gains. It's a survival mechanism. That doesn't mean loss aversion/hedging is the correct thing to do all the time.

[mikemca]

Hilarious, cant admit when youre wrong, its all good.

You are the one that is wrong sir and can't see/admit it.

Whether the Heat won or lost last night has no bearing on the fact he made the right decision by not hedging.

[jtoler]

You are the one that is wrong sir and can't see/admit it.

Whether the Heat won or lost last night has no bearing on the fact he made the right decision by not hedging.

So it was best to lose $400 than to win some money? Ask the OP what he wish he'd done.

[mikemca]

You're being results oriented.

Assuming he liked the Heat a lot ,which I'm pretty sure he did to lay that much juice, then he made the right decision.

Of course he is probably kicking himself but that has more to with his opinion on the game and not his opinion whether to hedge or not.