General Betting
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You price up an event, we'll use a football match with the home win, draw, away win, and you can back at 2.2 on a team you have priced up at 1.9. You place your bet at 2.2 and then the price comes in to 1.7 so you have very good value. However if that team had been 1.7 originally they would have been a lay so what would you do.
a) be pleased that you've achieved such a good value bet and hang on to it
b) green up because the price had moved so much from a value back to a value lay based on your tissue
c) any other
this is due to a disagreement and i do differently from a friend who says his way is far more efficient over a long period of time. I wont say who does what at this point I'll wait to see what the general concensus is. Just because i've added c) don't dismiss it and only think it was an afterthought.
a) be pleased that you've achieved such a good value bet and hang on to it
b) green up because the price had moved so much from a value back to a value lay based on your tissue
c) any other
this is due to a disagreement and i do differently from a friend who says his way is far more efficient over a long period of time. I wont say who does what at this point I'll wait to see what the general concensus is. Just because i've added c) don't dismiss it and only think it was an afterthought.
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The actual odds you can lay at are far shorter than 1.7 when you take into account the position you already hold.
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b.
Not for the purpose of 'greening up' though . It is just another good value bet. |
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Personally I would let it run, so a).
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Hello there.
If you are a trader then do b. If you are a gambler then do c. That would be trade out at 1.7 and then offer up a lay bet at 1.7 for the proportion of your bank that you feel is appropriate, so ultimately changing your position from backing to laying. They are just my thoughts, hope that helps. |
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c) green up and open a position the other way.
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In more detail, I'd back 13.16% at 2.2 and then lay 32.65% at 1.7, leaving a position of:
-7.06% (team win) +19.49% (team lose) equivalent of a lay at around 1.36 |
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My option would be C
I would now back all the other options for a dutch as their price would now be overs. Win which ever scenario unfolded. |
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B.
But what ever you do, do it consistently, not A one bet and B the next. |
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c) quite clearly with bells and whistles.
If you have priced it at 1.9 then it is a back at 2.2. It is then a lay at 1.7. Furthermore there is not even a case of making a level green book, if you still think 1.9 is the right price then it is time to go red on the selection at 1.7. |
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c) I'd lay to my normal liability the other way. It's a good value lay.
If odds moved to what I thought was 'fair' then I'd green up. |
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Assuming 1.9 is a true value price then you should be laying at 1.7 - that's a total no brainer, it's just a matter of how much.
Your back bet at 2.2 against true value of 1.9 is slightly better value than a lay at 1.7 so notionally you should have slightly more on it. Ideally you'd green up with a slight bias towards the win but in reality I doubt you'd bother and just green up in the normal way (all even) and move on. |
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Hmmm
perhaps i'm not optimizing certain opportunities then! I, currently, would back, we'll say for, £200 at 2.2 then lay £400 at 1.7 leaving + £190 on the away side and the draw and a -£40 on the originally backed side. Anyone has to remember that teams aren't being backed/laid prices are so the comments why back a team then have a red on them will be dismissed  |
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Why wouldn't you lay 1.70 for say £700
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It's a % thing
without going too deep i'd take a red but i wouldn't want to expose myself to a big red given that, in all likleyhood, the market at the off, when the lay would be placed, is more accurate than when i placed the original bet. All news is out in the open, everyone has digested it and the 2.2 i'd placed the bet at was of more value than the 1.7 lay. Does that make sense? |
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Not really. If you make the price 1.90 and you can lay it at 1.70 then that's what you do.
If you make the price 1.90 and the market moves to 1.70 because there's new information then do you still make it a 1.90 shot? |
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Has to be b) because it's commission free.
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Ahh the trouble now is that the question was originally answered on a completely hypothetical basis and now it is being moved into the real world where there are a whole myriad of new things to consider.
Is the game being played in Italy or Greece, if so i'd leave it well alone and go for option B. Has the price dropped to 1.7 with still a couple of hours to go, if so then i may leave it and trade out later on the assumption that the price may be even lower. Is there any new information available since it was priced at 1.9. How confident are you in your own pricing abilities? More new information may not make the decision as easy as from the opening post. |
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d) I lay some and lay some more until the price gets back to 1.9. Then I put up two blockers for 200k at 1.89 and 1.91 and have 1.9 as the pivot.
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The situation wd not have happened to me as I wd have put in a lay at 1.92 at the same time as matching the first bet.
Depending on my evaluation of my pricing in the light of any new facts, I wd be laying for my standard fraction of Kelly at 1.7. This wd depend on how much I cd usually get on my selections and the size of my available bank. The more and the bigger, the more willing I wd be to trade out before the bet meets my expected bet value. |
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It's a little confusing. If you are saying you think the correct price is 1.9 all along you should obviously take both bets and more. Whatever there is avaiable to the maximum liability you are willing to take on.
Both of these bets would be worth taking in isolation. Together the profit is greater than the sum of the two separately (due to comm savings, ignoring effects of PC). Greening up is not optimal, unless the amount you can get on gets you green by chance. Just get as much as poss on both sides even if you get stuck with a big red (up to predefined limits). If you're offering on both sides like Bayes suggests, you can't use Kelly as it is too conservative, and you need to factor in likelihood of getting matched and modify Kelly accordingly. If you've figured out how much of your money the market can handle and these limits are quite low in relation to your bank size, you don't need Kelly at all. |
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d) I lay some and lay some more until the price gets back to 1.9. Then I put up two blockers for 200k at 1.89 and 1.91 and have 1.9 as the pivot.
Hehe, my favourite answer so far, I like that, money talks but it don't sing and dance and it don't walk. |
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If you've figured out how much of your money the market can handle and these limits are quite low in relation to your bank size, you don't need Kelly at all.
The Investor, this is likely to be true of two runner events but not horses. Even if you aren't the kind of player that will religiously and in a single shot (or very few shots) place Kelly bets to yr estimates of true chances (and I'm not), in horses the available money isn't always low in relation to yr bank. In conditions races (listed and class 3), I frequently price up at 11-2 and see the runner at 16-1. You need Kelly and some formula for moderating it to get you rationally into the market. Buzzer, how you minimise comm. and pc (if necessary) also has to be a factor in what you do. |
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askari, if I understand you correctly, I agree. When I say 'how much the market can handle', the effect of your own betting on the price should also be taken into consideration.
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Some excellent input here which i must thank you all for.
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That's a cop out, buzzer.
Why were you asking and why wouldn't you keep laying? |
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I was asking purely for others views on how they would deal with the said scenario. I prefer to keep the majority of my money fluid on here, which may sometimes be wrong but it's how i've always played, i don't like having big reds going into play primarily because that money is tied up too long for my liking.
I appreciate many people deal with positions differently and, after a discussion with someone i respect, wondered how people would deal with the movements i described. It's been interesting to read the thoughts of people on here. |
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b) Youve priced it up at 1.9 and its available to lay at 1.7. Wouldnt look further than that
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Sounds a bit odd to me buzzer.
You price it up at 1.90 The Gods let you lay at 1.70... There's no question here. Percentages or not. You lay. I have to ask, what would you do in this situation? |
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I put, earlier in the thread, what i do in the situation.
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You're right, I see it.
If that's what you;re doing then you are giving away a large portion of any edge you have just to keep things 'pretty' |
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You guys all think much to complicated imo :)
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Anna you aren't American by chance?
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I had virtually exactly this situation yesterday just excepting the right price was absolutely certain as I could measure it and arb it on a parallel market. I didn't think about it long and took buzzers solution and not mine. The price has since moved back to where it should be and I am trying to rationalise why I took the irrational wimp route.
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Alex, a microeconomist called Kahneman won the Nobel Prize for demonstrating that people are risk-averse in situations of gain (e.g. greening up) but risk-seeking to a greater degree in situations of loss (i.e. they are very averse to redding up and tend to leave themselves at least one win).
This describes my betting precisely in book-making in that I hate losing the effort of making a potentially small-green book by being badly out just on one horse. However, I have taught m/s to take more risk when my judgment suggests it is rational to do so. |
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^
Which is what I expect almost everyone that makes money does. In all of human activity risk evaluation is one of the most underdeveloped. We are hardwired to want to win, which is an asset in most activities, as winning equals success. In betting making money equals success, whether you win 1% of your bets or 99% is not of primary importance. |
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I'm assuming the fundamentals haven't changed (possible fixing, etc) and 1.9 remains the estimated true odds? For most people who have not fully quantified their edge and thus cannot quantify their confidence in 1.9 being the true odds, a fractional Kelly staking on both the back of 2.2 and the lay of 1.7 would be the best option. I.e. if taking 0.2 Kelly stakes:
2.62% of total bank size on a back at 2.2; 3.83% of total bank size on a lay of 1.7. Hence leaving +4.63 on the original bet and +12.10 on the lay on a nominal 1000 unit bank. --------------------------------------------------------------- Alex, a microeconomist called Kahneman won the Nobel Prize for demonstrating that people are risk-averse in situations of gain (e.g. greening up) but risk-seeking to a greater degree in situations of loss (i.e. they are very averse to redding up and tend to leave themselves at least one win). Kenneth Arrow and von Neumann pioneered these sorts of descriptive studies with measures of absolute risk aversion and expected utility hypothesis that led to Kahneman and co. developing the study of behavioural economics. When it comes to betting as an "investment", bettors should ideally be risk-neutral: as long as outlay is sustainable, expected utility should be equivalent to expected value. --------------------------------------------------------------- d) I lay some and lay some more until the price gets back to 1.9. Then I put up two blockers for 200k at 1.89 and 1.91 and have 1.9 as the pivot. This strategy would probably be optimal but would really only work if (i) your bank size is large enough (as the 200k figure would more than imply on most markets) to move the market and (ii) your true odds estimates really are accurate. If you've mispriced by even a small margin, it carries unsustainable risk. --------------------------------------------------------------- In all of human activity risk evaluation is one of the most underdeveloped. Couldn't agree more. Statistical thinking and proper risk evaluation should play a much greater role in education. However, I can imagine plenty of downsides: less people playing negative expectation games means greater market efficiency and thus less opportunities. Furthermore, lottery funding, which in fairness can sometimes be useful, would probably be reduced. |
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When it comes to betting as an "investment", bettors should ideally be risk-neutral: as long as outlay is sustainable, expected utility should be equivalent to expected value.
Probit, I agree w/ this; I was trying to suggest that bettors make sub-optimal betting decisions in terms of expected financial return b/c they want to satisfy some other sub-function, like not having regrets or not appearing to be stupidly wrong when lots of other people were right. Can you explain the diff. between Arrow's studies of risk aversion & estimates of utility and the 'behavioural economics' of Kahneman? |
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I haven't read the whole thread (just spotted it) but my first
move would be to check first to see if I have made a mistake in my compilation. If happy, I would stay with it for a while, (I think), the reason being is I've never had a situation like that. It would be unusual. |
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Had a look at the posts, and it's easy. Tobermory gets
it right recognising the situation as two value bets. The first bet, a back at 2.20 is made not knowing the price will contract. When the price HAS dropped to 1.70 it is a bet, not because of the 2.20 bet, but because it's a value bet in itself. |