Tuesday, October 25, 2011

The Hedge (Update)

As you remember, when faced with my initial decision, I could have hedged at the outset and guaranteed myself either $660 (Cardinals win Series) or $387 (Rangers win Series), but decided to just wager game-by-game (we’ll call it an intra-series).

Game 1, bet 150 on Rangers to win 165.
Result: Lost $150

Game 2, bet 150 on Rangers to win 165.
Result: Won $165
Running Total: +$15

After Game 2, I wimped (stronger words are probably appropriate here) out and took the Rangers to win the Series at -180. Bet $360 to win $200.

I stayed away from Games 3 and 4 in hopes the Cardinals could steal one because the Rangers were -200 to win both of those games. I lucked out when Albert Pujols cemented his status as the greatest hitter of our generation in St. Louis’ Game 3 victory.

The people who do these sorts of things estimated Pujols’ first game 3 homer to have gone 423 feet. My guess would have been closer to 600. Ball was CRUSHED.

Game 5, bet 130 on Rangers to win 100.
Result: Won $100
Running Total: +$115 (with $360 hedge still at risk)

Game 6, leaning towards betting $150 on Rangers to win 165. This would leave me at one of the following two places:

Rangers win: $200 (series hedge) + $165 (game 6 bet) + $115 (running total) = 480

Cardinals win: -$35 running total (with $360 hedge still at risk) and put $300 play on Rangers in Game 7

Assuming Cardinals do win Game 6, my Game 7 outcomes would be:

Rangers win: $200 (series hedge) + $270 (game 7 bet) - $35 (running total) = 435

Cardinals win: $1260 (Vegas bet) - $360 (series hedge) - $300 (game 7 bet) - $35 (running total) = 565

Unless the odds spin completely against me, I should be guaranteed at least a $435 payday which is slightly better than what I would have gotten had I hedged from the beginning.

My only regret is the midseries hedge. Once I decided to go game-to-game, I should have held the fort.

In the end, that decision will cost me a few dollars, but overall, this has been a great learning experience and a solid return on my $10 investment.

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