How did we do Wednesday?
Records for
Tuesday, 12/13/17:
Love It = 0-0-0
Like It = 1-0-0
Total = 1-0-0
Records overall:
Love It = 3-2-0 (60%)
Like It = 4-6-1 (40%)
Total = 7-8-1 (46.7%)
What’s on tap for Thursday
and Friday?
ZILCH - As I
mentioned in an earlier post, the Power 7 games the next 2 weeks or so are few
and far between. I do see 12 games on
the slate for this Saturday.
With no games to
pick today or tomorrow, I’d like to provide a tool you and your amigos can use
when you’re ponied up in the sports book the next time you visit Las
Vegas. This tip will help you mitigate
some of your risk and will be especially fruitful for the folks who may not be
very familiar with the sportsbook but know how to crunch a few numbers.
Situation: I want
to put a few bucks down on some games, have a burger and a few cocktails, and
have a chance to win some money without risking a lot. How can I do this?
Let me derive a
hedging formula for you and explain how you can make it work for you at the
sportsbook.
First, let me
explain the premise this formula is built on.
The idea is that you will wager on a moneyline or a spread of your
liking, hope your team starts the game hot, and then put in another wager on
the opposing side at some point during the game.
Wait, why would you
ever bet on both sides of a line?! I’ll
explain.
By doing this, you
guarantee you cannot lose both bets and also give yourself a chance to win both
bets. Now, if your initial wager is
never on pace to win, you likely won’t have a chance to put in this second
risk-reducing wager, but you still have the chance to win your initial bet…which
is all you had before you read this post anyway.
Let’s take a look
at a concrete example.
Let’s say Duke is
playing North Carolina in basketball, and Duke is a 7 point favorite. You know how big of a rivalry this is, so you
wager $10 on the underdog: North Carolina +7.
Let’s say North Carolina has a 5 point lead going into halftime. Vegas knows Duke was the favorite going into
the game. They also know there is a good
chance Duke makes a comeback in the 2nd half. Vegas will likely set the 2nd half
spread at Duke -7 meaning that in order for you to win your 2nd half
Duke bet you will need Duke to win the game by more than 2 points. If your initial wager was North Carolina +7,
and your halftime wager is Duke -7, then you can win both bets if Duke wins by
3, 4, 5, or 6 points (This is called creating a window for yourself. Within the window, you cannot lose both
bets.). You can also win 1 of your 2
bets while pushing or tying your other bet if Duke wins by 2 or 7 points exactly. This gives you exactly 6 outcomes where you
either (A) win both or B) win 1 and push/tie the other while also not
allowing you to lose both bets. Now, you
might say the chance of hitting 1 of the 6 outcomes isn’t very high. In a way, you are correct, but let me give
you several reasons why the “window” opportunity is good to take advantage of:
1. You
can’t lose both bets, but you can win both.
At worst, you win 1 and lose 1. If
you bet $10 on each side, you lose *"the juice" of $0.91 while you had a chance to win $18.18 by
hitting the window. In my opinion, the
risk vs. reward is well worth it.
2. Vegas
is very accurate with their spread predictions.
For this reason, if you wager on 1 side to start a game and that side
looks good in the early stages of the game, there’s a good chance the result
will regress toward the original spread.
That regression gives you a good chance to hit your window.
3. Many
sportsbooks will give out food and drink tickets for all wagers to get you
betting on more games. They don’t care
who you bet on. So if you make 2 bets on
1 game with no chance of losing both bets, you may get 1 of these tickets for
each bet. If you lose 1 bet and win the
other, your food and drink still offset your $0.91 cost.
Ok, so you’ve told
me how the process works. Now, show me
the formula and tell me how to use it!
In our Duke vs. UNC
example, if both the initial and the halftime or in-game spread are priced at
-110, then it’s easy. You simply bet the
same amount on both lines. Let’s play
dumb and pretend we didn’t know how much we needed to wager on the halftime
spread.
In order to figure
out how to equalize your profit/loss no matter what the outcome of the game,
you need to offset the profits and bet amounts from the initial bet and
halftime or in-game bet:
Let’s set the
variables first.
P1 = Profit from
Bet 1
P2 = Profit from
Bet 2
B1 = Bet 1
B2 = Bet 2
L1 = Line 1 (The
line for spreads is usually -110 to -120.)
L2 = Line 2
Now that we have
the variables defined, let’s derive the formula.
1. P1
- B2 = P2 - B1 (offsetting profits w/ bets)
2. P1
= B1/L1 (The profit from bet 1 equals the bet divided by the line.)
3. P2
= B2/L2 (The profit from bet 2 equals the bet divided by the line.)
If we substitute P1
from line 2 and P2 from line 3 into line 1, we get:
B1/L1 - B2 = B2/L2
- B1
(Quick aside…all
these Bs and Ls are making me thirsty for a Bud Light.)
Now, we need to
solve the equation for B2 so we know how much to bet when the 2nd
line comes out.
B2/L2 + B2 = B1/L1
+ B1
B2*(1/L2 + 1) = B1*(1/L1
+ 1)
B2 = B1*(1/L2 + 1)/(1/L1
+ 1)
You now have
everything you need to make the right wager on the 2nd line. When halftime hits, check the line you will be
betting. If it’s a spread, it’s usually
going to be -110. If it’s not -110, it doesn’t
matter. Whatever the line is, if you
substitute it into the equation you will be able to easily calculate what your
2nd bet should be.
B2 = 10*(1/1.1 +1)/(1/1.1
+1)
B2 = 10*(.909 + 1)/(.909
+ 1)
B2 = 19.09/1.909
B2 = 10 or $10 (We
already knew we needed to wager $10 because the pregame and halftime lines were
identical at -110, but plugging the numbers into the equation verifies we've derived it correctly.)
Now, let’s say L2 (the
2nd line) is not -110. It’s
actually -115. In order to equalize your
loss if only 1 bet would win, you simply plug in 1.15 for L2 and solve the
equation again. I will save you the confusion/boredom. The value of your 2nd bet is
$10.21.
If you win Bet 1
and lose Bet 2, you win $9.09 ($10/1.1) and lose $10.21.
You lose $1.12.
If you lose Bet 1
and win Bet 2, you lose $10 and win $8.88 ($10.21/1.1.
You lose $1.12.
If you win both
bets, you win $17.97.
Let’s use our Duke/UNC
example again. Let’s say you bet UNC +7
to start the game, and they are up 10 points at halftime. Duke would probably be -7 or so (meaning the line is predicting they would lose the game by 3) for the 2nd
half. You could bet Duke’s 2nd
half moneyline at +120 (or whatever it is) and guarantee yourself a profit and
also have a window where you can hit both bets.
If Duke loses by 1 or 2 or wins by 1, 2, 3, 4, 5, or 6, you win both
bets. This is your window. If they lose by 3 or win by 7, you
push 1 bet and win the other. If they lose
by 4+ or win by 8+, you win 1 bet and lose the other but still guarantee a
profit. In the formula, instead of 1/1.1
(if the line is -110), for a line of +120 your calculation would change to
1*1.2. After crunching the numbers, we
find your 2nd wager would be $8.68.
If you win Bet 1
and lose Bet 2, you win $9.09 ($10/1.1) and lose $8.68.
You win $0.41.
If you lose Bet 1
and win Bet 2, you lose $10 and win $10.42 ($8.68*1.2).
You win $0.42 (Rounding throws the profit off 1 penny from $0.41 to $0.42.)
The formula I’ve
given you [B2 = B1*(1/L2 + 1)/(1/L1 + 1)] gives you all you need to equalize
your profit/loss when you have a window opportunity. You can always adjust your bet amounts based
on how much you like or dislike a line.
In my opinion, it’s always a good idea to equalize your profit/loss.
I apologize if I’ve
simply confused everyone. This sort of
thing is easier to discuss out loud than to write down. Until I launch my podcast, you will need to
settle for the written version. Feel
free to post a comment if you would like me to clarify anything.
As always, if you
enjoy my blog please share, like, and retweet thebisness.blogspot.com on Facebook
and Twitter.
Cheers!
*Note: “the juice” refers to the fee the sportsbook charges
for offering betting lines. Standard
juice is 10%. Spreads are normally
listed at -110 meaning your winnings are calculated as your bet divided by
1.1.
