Hedging bets on AFL Multi

[Skeppersap]

Hi Gang,

So, a few years ago I started an account on Sportingbet with $30, and have worked it up to aprox $550. Mostlhy multis, with a few exotics. All bets have been on the AFL.

Anyways, this round I have the following multi with a $10 stake:

1. Geelong -14.5 to beat Esendon.
2. Richmond tobeat PA
3. Fremantle to beat Collingwood
4. Adelaide -50.5 to beat GWS

So, at the moment, my $10 stake is worth $100, with one game to go, being Adelaide Vs GWS tomorrow.

My thoughts are, I can either:

a) Let it ride for the 20:1 to pay out on $10 and take home a cool $190 profit

or

b) Hedge my bets and get on GWS +50.5 at $1.80 odds. At those odds I could put down a $50 stake, and either take home $40 profit or $140 profit.

Just after some thoughts from those who gamble a bit more than myself. It apppears that I would be paying a $10 premium to hedge my bets, therefore is a -EV decision in this case. Is this the correct thinking?

 

[Rourke]

a) Let it ride for the 20:1 to pay out on $10 and take home a cool $190 profit

or

b) Hedge my bets and get on GWS +50.5 at $1.80 odds. At those odds I could put down a $50 stake, and either take home $40 profit or $140 profit.

Just after some thoughts from those who gamble a bit more than myself. It apppears that I would be paying a $10 premium to hedge my bets, therefore is a -EV decision in this case. Is this the correct thinking?

You are right that you have to pay a premium to hedge. In most cases it is a substantial premium, because it goes against your judgement of the likely result. The reason we hedge is to reduce risk. If you want to get into the mathematics, the Kelly approach is to define your bankroll 'utility' as the logarithm of its value and try to maximise that (although other functions may express how much you love your betting account better than the logarithm).

In your case, if you think that GWS is 50-50 to beat the 50.5 line, which looks about right to me, you are currently sitting on a 50% chance of a $730 bankroll (log = 6.59) and a 50% chance of a $540 bankroll (log = 6.29). This means your expected utility is 6.4423. You can increase that to a maximum of 6.4431 by putting $27.50 on GWS, for a win/loss payoff of $562 / $702.50.

This is easy enough to put into a spreadsheet or simple program so you can fiddle with the numbers.

 

[anabac]

What's changed in the GWS game between when you placed the bet and now to make you unsure? Or are you just nervous now?

 

[Geelong_Bisons_#36]

Hi Gang,

So, a few years ago I started an account on Sportingbet with $30, and have worked it up to aprox $550. Mostlhy multis, with a few exotics. All bets have been on the AFL.

Anyways, this round I have the following multi with a $10 stake:

1. Geelong -14.5 to beat Esendon.
2. Richmond tobeat PA
3. Fremantle to beat Collingwood
4. Adelaide -50.5 to beat GWS

So, at the moment, my $10 stake is worth $100, with one game to go, being Adelaide Vs GWS tomorrow.

My thoughts are, I can either:

a) Let it ride for the 20:1 to pay out on $10 and take home a cool $190 profit

or

b) Hedge my bets and get on GWS +50.5 at $1.80 odds. At those odds I could put down a $50 stake, and either take home $40 profit or $140 profit.

Just after some thoughts from those who gamble a bit more than myself. It apppears that I would be paying a $10 premium to hedge my bets, therefore is a -EV decision in this case. Is this the correct thinking?

I'll be cheering for GWS to get up today then