|Handicapping "Think Tank" technical handicapping and statistics|
| ||LinkBack||Thread Tools|
When to pull the trigger on an interactive bet (or any bet for that matter)...
...is a function of the opportunity benefits and potential opportunity costs betting now versus betting later.
If I were playing against a new interactive market maker for the very first time, I would probably be kicking myself at the end of the game because I either fired too early or totally missed an opportunity by waiting too long. In reality, I shouldn't be kicking myself because there was really no way of knowing the characteristics of that market; of how, when, and why the value appears and disappears.
As far as dollar amounts for when to pull the trigger, I will tell you that they are different for every market (I play mostly at WSEX and some at tradesports), different for every sport, and even different for the types of plays in each sport (i.e. dealing with favorites that are leading, dealing with favorites that are trailing, dealing with pick'em games that are looking like early blowouts, etc.).
The price discrepancies at which I'll pull the trigger should be different for each trader, for two reasons:
1) I am looking to make multiple maximum orders (50 contracts per order at WSEX) on each event, so it sometimes involves a slightly different strategy. You might be looking for a maximum total position of less than one full order, or more multiples of 50 than I am looking for. This is not to say that a person looking for a maximum position of 20 contracts should always buy the entire 20 at one pop, but sometimes he should so it is at least an option which is not the case for me.
2) The concept of "market efficiency", and how it pertains to your price estimate. Basically, market efficiency provides that if something looks too good to be true, it probably is. IOW, if your handicapping says that a certain play is a 70% winner on a -110 line, then certainly you are not totally correct (and maybe not correct at all). I must say, I don't consciousously consider my own market efficency unless I am constantly seeing the same type of play over and over again each night; and even in those cases, all I will do is try to re-examine the situation from every possible angle to try to find an error in my analysis. If I am unable to find an error or a different way of viewing the situation, I plow ahead at full speed assuming that I am right and everyone else is wrong. I do not recommend this type of recklessness for someone who is new to in-progress trading. It is much safer to go through the same re-examination processes that I do, but in the end assume that you are at least a little bit wrong if you are unable to find anything different.
I have found that the solution to this problem via through a subjective, intuitive thought process over the course of time. Everyone's personal optimal solution should be different. The price discrepencies that I wait to pull the trigger at range from $2 to $8 depending on the situation.
Mach -- thanks for taking the time to post here and the other thread. Very enjoyable reading.
I've also developed 2 conclusions:
1. I'm never going to play Interactives because you'll take all my money.
2. If you ever put your talents to prop bets I'm sure you could hit 90+%.
Not to pry, but is it possible that you could give us some examples of profitable trades and why you made them during a particular game? It would be invaluable to me.
For instance, with WSEX, I have done very well and then quite poorly trying to develop a winning profile.
For instance, I notice, in any sport, if one team gets off to a good lead (say 3-0 in baseball or 7-0 or 10-0 in football), you can buy contracts very cheap on teams you like quite a bit. I did this with much success with the Seattle Mariners who would often come back to victory and I have tried to do it with other teams and situations to a much less successful degree. Anyway, I have noticed there are many great intereactive opportunities if you have the stomach for them. I refer to last sunday's New England-KC game where, depending on one's skill you could have bought in and out and made a killing...
...thanks for your time...
Market efficiency tells me that the $20 bill I just found on the street does not exist, and yet I just put it my pocket...who said that? Wasn't it Milton Friedman? Geeze I forget, my Economics was about 30+ years ago (I majored in it along with Mathematics)...and I still to this day regard it as a "dark" science.
Anyway, this was the point of my original Q. My rule of thumb is: when I can see a difference of approx 5% (55% with 11/10 vig), I pull the trigger. But then what do I do when the dif goes to 10% a minute or so later? I then term it a separate occurance, and pull the trigger again. However, I do wait until I see things go over the 5% thresholds. I'd probably give any particular game "3 bumps max" even though I know I should bet every occurance when I see a calculated advantage. But, as I don't want to have too much bux tied up in one game whose win probs are correlated to a level that I'm incapable of calculating at this point, I set a rule and follow...and then spend tons of time later trying to find an optimal way of working the problem.
Here is a simple one from 15 minutes ago.
The Col/LA game closes with a total of 8un35. Depending upon your estimate of the value of "8", this implies that the chance of the game going over 8.5 is about 41%.
Going into the bottom of the third, the score is Col 2 LA 1. The price for Over 8.5 in the interactive is 36-41.
The question I ask myself is, am if I were betting on the over, would I be happy with the score thus far? I would say, that I would be thrilled with this start to the game. So I buy Over for $41.
I have been away for the past day and a half, but I will get to everyone's else questions and comments shortly.
I think it is a mistake to work on just one axis like that, simply based on your perceived ROI. I think it is necessary to add a "reliability" axis to your trigger-pulling.
For example, suppose you have a really good concept of how often a Pick'em team holds on to win when they hold 7 pt lead after the first quarter. For the sake of this example (i.e. <u>WARNING: intentionally bogus numbers used for this example, do not reuse them they are worthless</u>), you know that teams leading by a TD hold on to win 74% of the time, but the interactive market consistently prices it 65-70 allowing you to buy at $70 and make a solid profit. In this case, your 74% estimate is based on hundreds, even thousands of samples and you are very, very certain. However, using a proportional system like you describe, you might only get one unit on this play.
In contrast, when you are using your simulation to model the scenario in the other thread, where you value TB +2.5 at $87 when they are receiving the kickoff ahead by 3 points, you would be buying TB into a 70-75 market. In this scenario, I (and the rest of the jury in the thread) think you are way off and would be making a mistake by purchasing TB for $75. And with the enormous price gap, it is likely that you are going to get to your 3-"pop" maximum at one point or another on this one, resulting in greater bets on the a questionable play.
Glad to see you've enjoyed it.
However, I disagree with this extreme caution that you have (and many other people I have spoken to have) regarding in-progress betting. Yes, it is unlikely that you will get to my level of thinking without a ton of research and years of experience; but, you wouldn't avoid betting on a college football game just because you don't have the informational contacts and analytical abilities of BW or Tiger or BB or whoever. The scenario is exactly the same, really. If you can get down a little earlier than them, you can still get the number that they are betting. If not, are betting into a number that these guys do not think is worthwhile betting at this point.
The same thing is going on in the in-progress. Sometimes I know there is value and I am just waiting for it to get completely ripe before grabbing it. In that case, if you can recognize it you can sneak in ahead of me and the other big sharp players in the interactive. In all other scenarios, the price is what it is because the big players are not trading it much or are giving balanced action to both the buy and the sell. If you have a good, solid idea to apply the scenario that none of the other big players are using, you can profit.
There are tons of ideas that I ignore. For example, I absolutely no belief in the mysterious concept of "momentum". Other than injuries and weather, I will not adjust my concept of what each team's strength in future plays based on this momentum mumbo-jumbo. If you are certain that momentum has an effect on play, then I certainly won't be standing in the way of you making a profit.
Usually, if I think there is value on one side of a game, it is unlikely that the market will move all the way to the point that I can get out of my position at what I consider a decent price, until the game situation changes drastically. So the result is medium-term buy and holds.
I suppose this is another angle that I really don't look into. Simply playing the market in a strategy equivelent to taking a lead on a scalp, with the sole intention getting out of the position at a profit regardless of intrinsic value. I am not a big-time scalper, so this method is not appealing to me, but that is just me.
Great advice, Mach.
Taking a real life example, here's what WSEX has for tonight's game:
Event Series Name Series Bid Ask
CF-09-27-B TEXAS TECH -8.5 16688 49 54
CF-09-27-B NEW MEXICO +8.5 16689 46 51
I happen to think Tech is going to cover, but let's say that NM scores the opening touchdown. Suddenly, Tech would be trading around $30 right? Do I need statistically analysis behind me to look up 8 or more point favorites who give up the opening TD and then come back to cover, or do I just pull the trigger on my gut feeling that the first TD was a fluke and by and large Tech will score the next couple of times and I can either sell right there for a profit or hold to the end of the game?
My second question, if you will excuse me, is taking this hypothesis one step further:
Say everything I just said happened. NM scored the opening TD, Tech dropped down to $30 and I bought ten contracts and then Tech scored the next two TDS and the second quarter starts with Tech at bout 59-64.
How often do you sell at that point or do you hold til the end? Do you use mathematically statistics to back you up here or is gut?
My biggest problem is not BUYING at the right time, but SELLING at the right time.
Any advice you may lend would be much appreciated...
If gut feeling is your strength, go with it. Math is my strength so I use it to trade, but I don't believe it is requirement. Math done improperly can end up hurting you more than it helps you.
Regarding when to sell, the first thing everyone should learn is to not expect to always sell at the best possible price (in retrospect). You have no way of knowing exactly when the bad turnovers are going to occur. Try to get a price that you think is fair for your sale, regardless of whether that makes you a winner or a loser on your round-trip trade. This might be tough for the gut feeling player, to find the point at which "his team" is relatively most vulnerable compared to it's price, and I can understand how it might be harder than figuring when to buy.
thanks so much for the reply...
...so in summation, the angle that I use about buying up favorites who fall behind early because now I've got a much better price (say Randy Johnson gives up 3 in the top of the first -- suddenly a 75 is now down to a 45 or the above Texas Tech giving up an early TD) is something you don't consider, since you are dealing with probability/mathmatics?
If so, that's a bit depressing because I wanted you to unveil the holy grail and instead I learn that you just do your homework...[img]i/expressions/face-icon-small-wink.gif[/img]
Superbook, do not get intimidated!!!
The process that's been delineated throughout these threads is not as complicated as it seems.
It's only a matter of discounting what's going to happen into a current price.
This is not one bit different then making any normal bet.
In fact SB, I found the pick the price out of the air a difficult task, I've been playing them for years much more similar to the interview that Mach did, anticipating what could happen next and assigning a value to each outcome. If the MM, doesn't move the price commensurate with what I thought it should be based on the last play or series of plays, I'm in. I have a feeling I'm a little more cautious then most as I've watched more then my share of games never making a trade, but if you're watching the game and following along with the interactive more times then not you will recognize an imbalance.
Very interesting reading all these interactive threads, thanks to Mach and all the other contributors.
In 1998 the Department of Justice brought charges under the Wire Act against 22 American citizens involved in managing foreign-based sites. "You canít hide online," Janet Reno, the attorney-general, warned Internet betting operators, "and you canít hide offshore."
I do consider making the purchase, but I do it on the basis of statistics of comeback probabilities, etc.
Good reminder about the differential-type analysis; that probably more accurately describes what I'm actually thinking during a game. In these threads I feel I have to "start from scratch" when analyzing these sorts of situations to make any discussion make sense.
And yes TA there are times I follow it and don't make a trade, used to be that way with baseball when they only had the side. Pretty unlikely nowadays that they have the total as well.
I agree with you. You could get overwhelmed reading some of these threads. It really is very simple though. I would suggest pulling up the money line converter they offer and only betting during commercials for a first timer. Just wait until you see something that looks like good value and then jump on it.
Once you get a few trades under your belt it will be a piece of cake. The most risky and also the most rewarding time to trade is usually the end of the event. You really need to know what you're doing towards the end or you can get yourself in trouble.
One of my most productive times was when I got the Yankees against AZ in the world series in the 8th or 9th inning for $10 or $11, 2 or 3 games in a row.
One of my scariest moments was when I started buying Oak at $90, $92, $94, $98, $90, $88......That was the game a month ago when they were up 10-0 and they ended up getting tied in the 9th. I was in a horrible position, (not like me) I had 110 contracts which cost me about 10k to win 1k with the game going into extra innings. I could've got out of the bet and lost probably 4 dimes but didn't. I think I was in shock that I had put myself in that position. Eventually Oak(hatteberg?) hit a game winning hr. I hope I never do that again. It was a wierd game ...The announcers would say the A's are 150 and 0 when they lead by 5 or more runs, The were trying to death call them. Then they said Tam hasn't given up a homer in 72 innings and he gave up a jack to the next batter...I learned my lesson but thank God it didn't cost me any money.