Isnt hedging a bet pointless, this is gambling right?

[drunkguy]

The best way to think of hedging is in terms of the betting exchanges (e.g. tradesports). If you buy cheap and can sell when the price has gone up greatly, it's ALL profit and your risk has disappeared. Hedging is a good strategy in those markets. (I believe ATX had some good thoughts on this in a thread he started a while ago about NFL futures). One way to think about it (and the right way I think)...let's say you bought $200 worth of tradesports shares on Minnesota to win the Superbowl. The payout will be $2000 (just making up numbers here, but you get the idea). Now, say they make it to the divisional championship game as favorites. Those $200 shares might now be able to be sold for $1200. That's a $1000 profit. Sure you can stick around and wait for the remaining $800, but there's a degree of risk...if minnesota loses in either of the next two games, the shares are worth absolutely nothing. Depending on the circumstances, you may want to sell now, or perhaps try to squezze a little more out of it by waiting until they win this game and get to the superbowl. But the more profit you try to get, the more risk you have to take on.

I think everyone can see the value of selling early in a situation like that. Betting futures is the same thing, but instead of "selling shares" you are hedging by betting the other side...

 

[PatrickMcIrish]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by The General:
If you are a $100 bettor and played the following parlay.

Select #1 : College Football
Syracuse 10/25/2003 9:00:01 AM - PST
Spread +7 -110 for Game

Select #2 : College Football
Illinois 10/25/2003 9:00:01 AM - PST
Spread +15 -110 for Game

Select #3 : College Football
Louisville 10/25/2003 11:00:01 AM - PST
Spread -16½ -110 for Game

Select #4 : College Football
Arkansas 10/25/2003 4:15:01 PM - PST
Spread pk -110 for Game
Select #5 : College Football

Central Michigan 10/25/2003 1:00:01 PM - PST
Spread +7 -110 for Game

Amount : Risking 50.00 To Win 1,050.00 USD

If Arkansas @ 4:15 is the last leg and all I need to win the parlay, then I am going to hedge with the other side on that game. In this case I am guaranteeing myself up to 5X my normal bet of $100. That is value to me.<HR></BLOCKQUOTE>


General, thats not value. You are giving the value of the ticket away. If you hedge off what you bet you are giving up the huge edge you have when 415 rolls around. You have a $50 bet that will return over a thousand dollars at that point. Why would you get off any of that? Again if it's a bankroll concern than that is fine. However don't kid yourself, you are making the wrong long term play. If you are serious about gambling all these hedges when you have the advantage will cost you in the long run.

I'm probably not explaining this well but the idea when you get in a favorable position is to take advantage of it. Full advantage. When you say "yeah but I'm ensuring a profit" that may be true but it is short term. Think of it like poker and each bet being one hand in a life long event of happenings. If you give the positive expectation of your bets away when you get a edge you are decreasing your chances of winning long term.

If once in a lifetime stuff comes along then that's different, maybe make a move fully realizing even then you are in the best position numerically to stay pat. But hedging off every teaser, parlay and futures bet you make when you get the odds working for you is not advisable. When you lose you take the full loss but when you win you dilute it down with hedges? Anyway just my input on the matter, carry on......

 

[jwunderdog]

General,

If you are going to hedge the last legg of a 5 team parlay, why didn't you just play a 4 team parlay and save the VIG?

 

[TheGeneral+]

Maybe the fact I do not see or try for these situations often is key. When I have hedged is mainly when I have a contest winnings on the line with one game being needed.

I suppose if multi team exotics are apart of your arsenal then you do not hedge, but for me when the opportunity knocks to make a guaranteed profit of several times my normal wager I am biting.

I do not play 3 or more team parlays or teasers. If a person is going to play several of these as a way of wagering strategy I can see some validity in sticking with your bet.

Let's say I got drunk and punched in a 5 teamer and got to the position of hedging like above. I am going to hedge that bet. I would never wager a 3 or more team parlay or teaser expecting to win.

 

[Aladdin1001]

Hedging or not depends on individuals and they both make sense.
Its like buying insurance in a blackjack game. If you have a black jack, and the house has an ace, insurance pays 2-1. If you stake all your wealth and cannot afford to lose, let's say a million bucks, you may want to hedge by buying 500 thousand and you will make 1 million irregardless of the outcome (although the probability of the house drawing a 10 is only about 4 in 13). Despite that it is not worth it, you are guaranteed a profit.

However, if you are only betting an amount you can afford to lose, u may take the risk and maximize your profit if the house don't draw a 10.

Conclusion: Agreed with Patrick, you will be worse off hedging in the long-run consistently, unless it is the last game in ur life (million dollar win):!