Hedging futures

showme1953

Took Ohio State + 7.5 as futures play a couple of months ago. Seems like a great thing with the current number where it is. Wondering what analysis anyone does on when to hedge and how much to hedge. I like the fact that I go over several key numbers. But not sure that means as much in college. Basically the only way to middle is if Okl wins the game. But I still think OState wins the game. Really don't want to hedge but feel like I might be missing something if I don't take a 20 to .30 hedge position. Any quants out there with an opinion.

TexasHookEm

showme1953 wrote: »

Took Ohio State + 7.5 as futures play a couple of months ago. Seems like a great thing with the current number where it is. Wondering what analysis anyone does on when to hedge and how much to hedge. I like the fact that I go over several key numbers. But not sure that means as much in college. Basically the only way to middle is if Okl wins the game. But I still think OState wins the game. Really don't want to hedge but feel like I might be missing something if I don't take a 20 to .30 hedge position. Any quants out there with an opinion.

I think this concept has been addressed a bunch on BT, and one of the main mantras of this forum is to only hedge if you think the OU bet itself would be +EV in a vacuum (i.e. regardless of your Oh St. future) unless a) you overextended yourself on your initial bet or b) you stand to win a life-changing amount of money. It doesn't seem like you think OU +2 is +EV, so you shouldn't hedge unless a) or b) apply.

As a side note, I learned years ago that in a situation like this, you're usually better off being content with your future that is almost 10 points better than the current market than you would be fishing for reasons to make OU +EV in your mind to rationalize a hedge.

Ronbets

TexasHookEm wrote: »

I think this concept has been addressed a bunch on BT, and one of the main mantras of this forum is to only hedge if you think the OU bet itself would be +EV in a vacuum (i.e. regardless of your Oh St. future) unless a) you overextended yourself on your initial bet or b) you stand to win a life-changing amount of money. It doesn't seem like you think OU +2 is +EV, so you shouldn't hedge unless a) or b) apply.

As a side note, I learned years ago that in a situation like this, you're usually better off being content with your future that is almost 10 points better than the current market than you would be fishing for reasons to make OU +EV in your mind to rationalize a hedge.

Very good post TxHook'em.............but I don't think he wanted to hear that.

ericvanden

I'm in a similar position but I purposely wagered much, much more than a normal wager on the +7 and +280 ML with my local but did so knowing that the line would be at most OSU +3.5/+4 (+160/-180). I wagered it back on OU +2.5 and +115 to the point where I am playing with house money. That's a bit different than your situation as I'm following through a predetermined plan. If I'm you and you haven't overbet, I'd stick to your +7.5.

bumpo

As stated above, it's only the right play if you think the second bet is +ev. You have a very nice edge currently. Why give any of that back?

showme1953

I agree Texas hook me, in rereading my post, I think it cries out that I don't like Okl at all. I posted because I Stltill want to hear other opinions whether they tell me I'm full of it or not.