Lloyd Christmas said:
Your right. Tell me one good reason why. I bet KC at 10 to 1. Now I can get giants +130. Looks like a perfect scalp too me. Game 7 are crap shots. Especially when I like the under. Tell me one pro better that wouldn't take some free money. And yes I do like the Giants a little better tonight.
Steve, I'm happy to explain this (again) if you guys will actually listen and not see the semblance of a math equation and immediately close your eyes.
Let's say the consensus is -140/+130. This gives us a no vig of +134 and an implied probability of 42.6%
If you bet $100 at 10/1, an even scalp on the other side at +130 would give you a wager of $478.26
If your original bet wins 57.4% of the time, and the +130 will lose 42.6% of the time, you plug those into an ARB calculator and you get a guaranteed profit of $521.74
If you did not hedge....
57.4% of the time you would win $1000 ($57,400)
42.6% of the time you would lose 100 ($4,260)
Subtract 57400-4260 and you get $53,140.
That's what you would expect to make if you did this 100 times without hedging. To see what your average would be each time, you simply divide that number by 100 which would give you $531.40 vs. $521.74 if you hedged. It may not seem like a lot but it's an uphill battle fighting the juice anyway, no need to compound it.
If you are OK making the wrong decision for your own piece of mind then that's fine, but it's not an argument that hedging is mathematically the wrong thing to do.
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