** JACKPOT SYNDICATE ** HEDGING? IS IT PLUS EV? ** ANSWER: ABSOLUTELY NOT BUT WE'LL STILL DO IT SOME

StayOrGo

Just a couple of comments regarding the common misconceptions on "Hedging".

Firstly. "HEDGING" will ALWAYS BE a NEGATIVE EV process.

However it is a NEGATIVE EV process that we MAY choose to accept to GUARANTEE a return.

For example if we stand to win 10K we may place some individually -EV bets to ensure we get a minimum £2K return, say, but would reduce our 10K profit to say £9.5K.

However, as our "hedge bets", are just bets with a bookmaker, they will, by definition, statistically be -EV in line with the betting percentage of the bookmakers book.

That's NOT to say we shouldn't do it, to the contrary, it is sometimes very desirable to guarantee a decent return, however lets be under no illusion here. IT'S NEGATIVE EV.

Let's give you an easy example to understand.

Supposing we were about to win the lottery (dice version), and "ALL" we have to do is "NOT THROW A 6" with the last throw, to win £1,000,000.

If we had the funds we might have £100,000 at 4/1 with a bookmaker that the throw DOES produce a 6.

It's a BAD bet, as the odds if "fair", should be 5/1, but it guarantees us £400,000.

So is appealing, but in isolation, bad value.

Cheers,

G

P.S. Long term, unless it was to cover a MASSIVE payout. Would we be better off NEVER hedging?

YES WE WOULD!

rspca12

In Response to ** JACKPOT SYNDICATE ** HEDGING? IS IT PLUS EV? ** ANSWER: ABSOLUTELY NOT BUT WE'LL STILL DO IT SOMETIMES **:

Just a couple of comments regarding the common misconceptions on "Hedging". Firstly. " HEDGING " will ALWAYS BE a NEGATIVE EV process. However it is a NEGATIVE EV process that we MAY choose to accept to  GUARANTEE a return. For example if we stand to win 10K we may place some individually - EV bets to ensure we get a minimum £2K return , say, but would reduce our 10K profit to say £9.5K. However, as our "hedge bets", are just bets with a bookmaker , they will, by definition, statistically be - EV in line with the betting percentage of the bookmakers book. That's  NOT to say we shouldn't do it, to the contrary , it is sometimes very desirable to guarantee a decent return, however lets be under no illusion here. IT'S NEGATIVE EV . Let's give you an easy example to understand. Supposing we were about to win the lottery (dice version), and "ALL" we have to do is " NOT THROW A 6" with the last throw, to win £1,000,000. If we had the funds we might have £100,000 at 4/1 with a bookmaker that the throw DOES produce a 6 . It's a BAD bet , as the odds if "fair", should be 5/1, but it guarantees us £400,000. So is appealing , but in isolation, bad value. Cheers, G P.S. Long term, unless it was to cover a MASSIVE payout. W ould we be better off NEVER hedging? YES WE WOULD!
Posted by StayOrGo

v interesting post g