To hedge or not to hedge

[Brandon]

It's on ESPN and easily accessible on the web, but long story short is there was an article about a gent that had his father, who was in Vegas, place a bet on Auburn to win the national championship at 500-1 with a $100 bet. Thus, if they won it's a 50k win. The article is more about how lucky Auburn.

 

So he came out last week with his potentially winning ticket and many on Twitter told him to hedge his bet and he considered it. Last I saw it was FSU -400.

 

If you're in his position do you let it ride for 50k or hedge it for a guaranteed 10k win?

[Ordos]

Hedge, they lost.

[Brandon]

I was hoping for the 20/20 view...granted it's probably not possible.

 

I think betting 40k was 6k win with FSU. 

[arch stanton]

Sure money is hard to pass up. I would have hedged it.

[TobiasFunke]

Sure money is hard to pass up. I would have hedged it.

yup

[yk9001]

You would have been paying a huge premium to get that hedge.

 

Since FSU was an 9 point favorite, I am guessing you would have had to pay at least -300 and up to -350 for your moneyline bet.  So for every dollar you want to hedge, you have to pay $3 or $3.5.  That's a pretty steep premium.  Prohibitive, imo.

 

Plus, the article I read said where he didn't want to affect karma, his mojo, etc.

 

Hey, he had a great run, got some pub and had the night of his life.  Frame the damn thing, and it will be a talking piece in his basement for a lifetime. the rest of his life (I hate using that other word).

[St1ck]

I for sure would have hedged. I'll gladly take 10k off a $100 bet. 

[Adam]

You have to hedge if that math works. Not sure it did in this case. 

 

I was alive to a Pick 4 (horse racing) a few years ago in the 4th race, with three horses on my ticket. The payouts were something like $4K, $3800 and $2500. I was afraid of one horse not on my ticket. He was 4-1. I put $100 on him and he won. I missed the big score but I still made $350 on the race. 

[yk9001]

You have to hedge if that math works. Not sure it did in this case. 

 

I was alive to a Pick 4 (horse racing) a few years ago in the 4th race, with three horses on my ticket. The payouts were something like $4K, $3800 and $2500. I was afraid of one horse not on my ticket. He was 4-1. I put $100 on him and he won. I missed the big score but I still made $350 on the race. 

 

Its always got to be about you, doesn't it??

[Blarg]

Gardening tips are so hard to find which is why this thread disappoints on so many levels.

[Adam]

Its always got to be about you, doesn't it??

 

Only when it involves gambling. I have far too much experience

[yk9001]

Six guys in vegas this fall went in on a $600, three-team, NFL parlay.  We won the first two games, the third was the SNF game, Atlanta hosting NE.  We took Atlanta, but I wasn't feeling it - AND you could get NE at even money (+100).  So I hedged $200 the other way, and when NE covered, I felt good to at least get something out of it.

[Adam]

Six guys in vegas this fall went in on a $600, three-team, NFL parlay.  We won the first two games, the third was the SNF game, Atlanta hosting NE.  We took Atlanta, but I wasn't feeling it - AND you could get NE at even money (+100).  So I hedged $200 the other way, and when NE covered, I felt good to at least get something out of it.

 

Good move. It still sucks, but definitely easier to swallow. 

[InsideThePark]

I was hoping for the 20/20 view...granted it's probably not possible.

 

I think betting 40k was 6k win with FSU.

If the moneyline was anywhere near that bad, no way would I have hedged it. I'm sure it stung a bit but that's something you live with no regrets.

[Brandon]

yeah, kind of how i leaned but know some dudes here know a bit more about gambling.

 

the article i read was -400. the situation i presented was someone in the comments section:

 

$100 = $50k if Auburn win; $10k if hedged

 

$40k = $6k if FSU win

 

Guy was basically assuring $100 into $6k or $10k, but you also have to put up the $40k initially.

[Adam]

He could've put $1100 on Auburn to cover though for a grand

[Brandon]

if he does that isnt he just getting $2200 minus the vig?

[Adam]

It would be a gamble, so not a straight hedge, but you bet $1100 for a $2100 payout. I think Auburn +9 was a pretty solid bet. 

 

I don't know. Some sort of additional action on the game probably would've been a good idea. But it depends on the guy. He may not be much of a gambler and he sound so diehard that he may not really have cared. I don't know that I would be too keen on hedging a bet I had on the Angels. 

[arch stanton]

For the record, I'm stunned that the best money he could get on FSU was -400

[Brandon]

yeah, he said he initially considered hedging, but then, like yk said, he mentioned mojo, karma, etc. and just let it ride wearing the same clothes he wore when they won it all a couple years ago.

 

maybe the -400 was when he looked, i imagine the money shifted the other way towards kick off.

 

i ask because i didn't think the money made sense to hedge, where in a lot of cases it might.

[Brandon]

also, i watched the end of the game. what a kick to the dick if you had this riding and how the game unfolded. it was almost chiefs/colts like with the highs and lows with the extra gut punch of the money on the line.

[Brandon]

mods, please move to obamacare horror stories thread.

[Adam]

lol

 

Hedging is easy in Horse Racing. You're almost always going to get at least 7-5 or better on a hedge bet. 

[Brandon]

remember that crash course you gave derek and i?

 

that was dope. you should do that and have your own show on saturday mornings on am830.

[yk9001]

I was on a game show about 11 years ago, some entertainment trivia show on the GSN, I forget the name.  The host was Todd Newton.  I won a little more than 17 grand.  It was an awesome day.

 

Anyways, there were a bunch of contestants, and if you got through to the second round, you could win some big money.  Answer one or two questions, you could win $100 or $250, and you could stop there.  Answer five or six and you could win low 5 figures.

 

I was amazed how many contestants stopped at $250 or $500, when 10 grand was four or five questions away.  Maybe many were homeless and needed the $250 to live.  But most, I suspect, didn't understand the concept of EV - they were passing on winning 5x or 10x or 20x by answering a few more dumb questions.

 

 

I think this Auburn guy understood the value, (or lack thereof, considering the punishing nature of a moneyline bet) of his bet, and made the correct decision.