Saturday, 16 November 2013

Second-Guessing

A frustrating Thursday night / Friday morning in the NBA with the Oklahoma City Thunder giving up a game-winning shot as time expired in a loss to the Golden State Warriors which cost me about £900. Well, £450 after Super Premium Charges are taken into account – not that there is anything ‘super’ about them.

One thing that I always seem to mess up on is how to close out a winning situation. As is my wont, I was laying the Warriors at what I felt to be too short a price, and my opinion appeared to have been proven right when the Thunder completed a comeback from 14 points down with 7 minutes left to lead by one with 2.3 seconds left.

At this point I am in the red on the Warriors, decently (by my modest standards) large green on the Thunder, so what to do? The Thunder at this point were trading at about 1.6.

Basketball is perfect in these situations, because there’s a time-out when the market settles down and you have time to make a decision, for which there are a few options:

A) Take no further action

B) Reduce or eliminate the current risk on the Warriors

The position I was in, using approximate numbers, was Warriors -£600, Thunder +£2300, Thunder price 1.6.

Now that’s a decent win if the Thunder hold on, but do I want to risk losing £600 in the event that they don’t? That’s a rhetorical question, because the answer is that I am not in the business (albeit part-time) of gambling, and preserving my bank is important, so the question becomes, “is that price of 1.6 value”? 

If it isn’t, then the right decision is to take the value, whether that be backing or laying, but if the price is close to value, and in my opinion it was close enough, then I want to at least eliminate the downside. So first my numbers became Warriors £0 Thunder £1,940, but then I want to at least show a profit on the event, which means giving up £60 from a Thunder win to buy £100 on a Warriors win. Continue this through to the pivot point and you end up with approximately £1,200 on each side.

Unfortunately for me, as the screenshot shows, I didn’t lay enough, stopping at the £600 mark. I've noticed this before in myself - it's almost as if I don't want to be disrespectful to the team that got me into the winning position! 
It seems like when I level up, I would have been better off leaving the bet to run, and when I don’t level up, I would have been better off had I done so. Of course it only seems that way, but assuming the price is close to fair, following a rule to always level up would take away the second-guessing afterwards. 
Still in the NBA, and NBA Tips are still under water, although the bleeding has stopped for the time being. Still down on the season by 16.76 points (ROI -26.6%) though. 
Like the Peugeot lion, John Walsh goes from strength to strength in the NHL, with a push and two winners since the last update, and now up by 10.02 points (30.36%). His NFL picks aren't quite so good yet, although he did eke out a very small profit last weekend.

4 comments:

Anonymous said...

Nice stuff

Is possible to specify mechanically the risk reward ratio of bets in this case variable hedge? For example, at twice the rate sell 50% stake etc...

L.

Ellis Rayner said...

If you believe 1.6 was a fair price then how about loading your greens to reflect that? 1.6 = 62.5% so based on your figures about £1,420 and £850

Ellis Rayner said...

If you believe 1.6 was a fair price shouldn't you load your greens to reflect that? 1.6 = 62.5% so based on your figures about £1,420 and £850....

John Walsh said...

Couldn't help but laugh at you not wanting to be disrespectful to the Oklahoma City Thunder. I believe you mentioned that Golden State is your favorite basketball team. Do you feel like you disrespected the Warriors?

I bet on the Montreal Canadiens last night and against them tonight. I'll let you know if Lars Eller calls me out.