2015 MLB Optionality
homerplayer
Senior Member
keys to the candy store
me being the altruistic chap that i am, have decided to give out the following free of charge. just when this approach becomes more wide spread, remember i presented first here in a thread last year, and now more clearly defined and accessible today. i will profit only in name recognition. although there is a famous quote about science discoveries never going to the guy that indeed discovered them.
quick background. been gambling for more than 20 years now. been working in Derivatives for the worlds largest custodial bank for last 16 months, mostly IRS and CDS with a sprinkle of TRS. point being to the novice investor, swaps basically 'give you the right but not the obligation' to enter into some sort of silly underlying deal. kind of like betting an opener or a not fully mature line.
i believe in EMH, semi-strong in investing and full on in sports betting. i also believe it would be foolhardy to go up against the best modelers in the world. but makes complete sense to follow them. last year when i beat closers i finished 480-445 +80.52 Units. fine, we can live with that. but we lose a fuckton on when the closer beats us or finishes flat. last year was 176-223 -57.73 Units when losing and 31-45 -13.97 Units. a good profit, but for the work (minimal as it is) i know we can increase the efficiency.
obvious problem here is how to limit loses. full circle to close the logic. much like derivatives, we have the option to buy our way out of investments we feel we lose money. and we know that long term negative CLV will mean lost units. so we buy our way out. simply the opposite of Arbing, which obviously has the logic backwards and is a terrible long term strategy where MLB is concerned.
there ya go. go out there and grind out a healthy MLB profit while working 15 minutes a day on it, as follows:
wake up check lines
bet line
8 hours later
check lines
option out of -EV investments
will post April's record later, also my first negative month on positive CLV.
me being the altruistic chap that i am, have decided to give out the following free of charge. just when this approach becomes more wide spread, remember i presented first here in a thread last year, and now more clearly defined and accessible today. i will profit only in name recognition. although there is a famous quote about science discoveries never going to the guy that indeed discovered them.
quick background. been gambling for more than 20 years now. been working in Derivatives for the worlds largest custodial bank for last 16 months, mostly IRS and CDS with a sprinkle of TRS. point being to the novice investor, swaps basically 'give you the right but not the obligation' to enter into some sort of silly underlying deal. kind of like betting an opener or a not fully mature line.
i believe in EMH, semi-strong in investing and full on in sports betting. i also believe it would be foolhardy to go up against the best modelers in the world. but makes complete sense to follow them. last year when i beat closers i finished 480-445 +80.52 Units. fine, we can live with that. but we lose a fuckton on when the closer beats us or finishes flat. last year was 176-223 -57.73 Units when losing and 31-45 -13.97 Units. a good profit, but for the work (minimal as it is) i know we can increase the efficiency.
obvious problem here is how to limit loses. full circle to close the logic. much like derivatives, we have the option to buy our way out of investments we feel we lose money. and we know that long term negative CLV will mean lost units. so we buy our way out. simply the opposite of Arbing, which obviously has the logic backwards and is a terrible long term strategy where MLB is concerned.
there ya go. go out there and grind out a healthy MLB profit while working 15 minutes a day on it, as follows:
wake up check lines
bet line
8 hours later
check lines
option out of -EV investments
will post April's record later, also my first negative month on positive CLV.
Comments
Cliff notes...When his play beats the close, stick with it. When his play is worse than the close, eat the juice and play the other side.
My biggest question for homer...Do you think that those plays that "lost" to the close are suddenly such -EV plays that it's +EV to play the other side at a worse number? Is there something that makes you think that the other side would be +EV at the new line other than your ~500 game sample size from last season?
Surrender? What did McAuliffe(no not the ex-Tiger) say to the Germans in Belgium? "NUTS"
https://www.youtube.com/watch?v=_oxPovB51X0
Bay - exactly what TommyL said
TommyL - i purchase my contracts either the night before when i go to bed or between 6 and 7 am EST the next day. on a day like today when nothing goes off until 7, i check them again at 6:30 pm EST. so when these things have been shaped by people with superior smarts, success and money than myself i usually just buy my way out no questions asked, except in one off situations. the one thing i am absolutely certain of is that a game like today, when i have Sea (137), if that thing closes at in the (130) range my original position is -EV long term. and at ~2,000 plays a year i am certainly viewing this thing long term.
the simplest logic behind it is i believe the following are true:
EMH (Efficient Market Hypothesis - Bay) as far knowable information shaping the line making closers efficient
given that fact, positive CLV will equate to winnings long term while negative CLV will do the opposite
getting destroyed on CLV so far this year at 57-73 (20.05) Units. i know that will turn around long term. however, we have the extremely bright spot of optioning out of -CLV.
without it: 27-34 (11.14) Units
with options: +1.35 Units
as long as we can maintain something close to the 0 Units on -CLV we will be swimming in the gravy.
just my perspective and an off the wall theory, but in a perfectly efficient market both sides would be -EV if we strictly used the raw data for every game that closed at a given number, say 135/125.
if there were a nobel prize in the realm of gambling, i totally deserve that shit. when comprehended in the true breadth and scope and how it could revolutionize MLB betting for peeps with BR Under $10K, which i would conservatively estimate at 90% of the gambling population!!
anyone else excited?!?! lets do this shit...
Your enthusiasm is off the charts. However, no thanks I'll pass.
Dominus vobiscum. You've mighta found the Holy Grail.:shrr:
What do you mean by crushing close? I assume you mean betting at the close correct?
If the line don't move his way by 6:30 pm he opts out of the play by betting the other side and losing juice.
So Homer's theory is 100% based on market efficiency. I'm really not a fan of market efficiency.
ahh ok, that's nice I hope it continues. I was never a fan of parabolic moves in any market. Have you faded any of those moves yet?
usually try to respect money, but sometimes have to trust your numbers.
as for the op which i don't follow, hedging off poor #'s and keeping good ones is probably no better than coin flipping.
Play does not have to be +ev for it to be +eg to play off it (been preaching this here with goats for years) BUT I'd really hesitate strongly against anyone thinking about adopting the OP approach. Kelly suggests an optimal wager given an exact estimate of win %. What are you using as your estimate when the market moves against you? Your line (then BET MORE), the market line (then prob bet against). If you don't know what I'm talking about, then your best bet is prob sticking with your first bet.
I agree to some point you have to respect money, but I get very uncomfortable when I don't know and can't pin point who or where it's exactly coming from. The main reason I feel this way is probably from all the trading I've done over the years of financial markets where I can see all the movers on the level 2 and 3 screens. Not that its 100% bullet proof, but it does gives you better perception of whats going on. When my uncle first took me to meet Joe Borsellino in the Chicago Snp Pit back in 2008 and I seen the way Joe made trades I was totally amazed by his skills and then I noticed when the woman that worked for GSachs used to get up off her chair also known as the wicked witch of the East with hair so RED she could melt every ones money and turn it to dust in a matter of minutes if you were on the opposite side of the trade. So I asked Joe how come you never fade her? He said to me, "that's just a very bad idea I tried it a couple times when i thought I was right and I left this PIT with Tire marks on my back. Like always there is a time to trust your numbers and certain times when you can't, because in the Sports market we can't all see or know in the open who or what everyone else is doing.
74-103
when beating that number. excited to tease this thing out more with the sharp minds here on BT. although i guess the discussion might never get beyond EMH with believers on one side and naysayers on the other.
Ya either you believe in the market being efficient or you don't, and a month of games shouldn't change that.
If you keep pounding great bets that beat the close, you're going to win long term. Every sharp contact and everybody that I know that wins at this believes that. All you can do is buy the stock for less than it's worth, you can't control the results in the short term.
As for your strategy, I don't think it can work unless you live in a juice free world, but if it's working for you then great.
TIME WSH CIN
05/30 03:34 PM 2.02 1.91
05/30 03:02 PM 2.00 1.93
05/30 02:47 PM 1.98 1.94
05/30 02:46 PM 1.96 1.96
05/30 12:50 PM 1.91 2.02
05/30 12:49 PM 1.90 2.03
05/30 12:48 PM 1.87 2.06
05/30 11:57 AM 1.83 2.11
05/30 11:40 AM 1.82 2.13
05/30 10:20 AM 1.80 2.15
05/30 10:17 AM 1.79 2.16
05/30 08:48 AM 1.82 2.13
05/30 08:48 AM 1.83 2.11
05/30 08:44 AM 1.80 2.15
05/30 07:59 AM 1.81 2.14
05/30 07:50 AM 1.83 2.11
05/30 05:41 AM 1.79 2.16
05/30 03:44 AM 1.83 2.12
05/29 05:39 PM 1.79 2.17
05/29 04:53 PM 1.75 2.23
Lets say we purchased cin at the open at 2.23. The close tell us we have a 51.4% win% and a ROI of 14.62%. (1/1.91)/((1/ 1.91)+(1/2.03))=0.514 ..... (.514)*(2.23-1)-(1-.514)*1 = .1462. Obviously nothing to sell here.
Now lets say we purchased wsh at the open @ 1.75. The close tells us we have a 48.6 win% and a ROI of -14.95%(ill spare the math from here on out) . From what i can tell this is a position you would ''opt out'' and sell your position like a backwards arb.
Let's assume you wagered 100$ on wsh at the beginning and now wager 91.82$ on Cin to opt out(second wager is adjusted to have the same payout as the first 175$) You have successfully reduced your horrible ROI of -14.95% down to only -8.67%. But the problem is that you increased your stake. Originally you would have a expected loss of 14.62$ and now you have expected lose of 16.62$ due to a larger total investment in this game even at a reduced ROI.
Agree
just popped in to say May was brutal as well.
64 - 81 (11.58) +CLV
28-32 3.08 -CLV
3 - 4 Flat
i promise one of these days i will jump back into the debate and i also admit i read none of the posts above, again apologies for that. toss in will's funeral and brother in law in hospital, i have very little time do to anything. sorry.
oh, but now we can frame the debate in terms of CLV. either you think it is bullshit or you agree with me that +CLV will lead to long term winnings and our goal is to minimize the impact of the -CLV, which we successfully did in May.
Sorry about the funeral and your BIL.
Rich/Wraps - in agreement on the Market failing to reach 100% efficiency. in disagreement on long term losing assertion. but we will have data OTA moving forward.
D - we don't want a hedge on every bet, that would be utter silliness.
yinz guys are way over thinking this. it is basically taking what we learned when investing in OTC Swaps or FX Forwards. get in at a price. if you like that price, let it ride. that price moves against you, option out of that shizz.
i understand this idea may never take root, which is fine (that is not meant to discount the mental dexterity required to birth the idea). it is simplistic in it's approach while also being counter intuitive. the latter being only time it seems there are discussions about such things it involves the Arb opps on positive line movements. little to no attention is paid to the negative line movements.
don't overthink this, i did that part. and fuck stocks, this ain't no stock market anymore. i was guilty of that view as well until about 14 months ago.
let's bare bones this thing for a second and start from zero on our trip down the logic path.
step one:
what does a posted line an independent event represent? (it will be the most common outcome if the teams were to play an infinite number of games)
step two, depending on your answer above:
is positive CLV good or bad and why? (again viewed through the prism of my opinion of step one)
now you are off and running. mull those over for a bit.
and while i am nowhere as smart as the billionaires running bridgewater, same approach, different arenas.
Your funny Homer. Why would you want to bet sports if you where as smart as them when you can just fleece all your customers on fees
Hedge funds had a horrible year, but managers are billionaires
http://nypost.com/2015/01/20/hedge-funds-had-a-horrible-year-but-managers-are-billionaires/
Homer, we're not over thinking it. If you option out of every play that moves against you and only keep the ones that moved your way is not going to work long term. Why don't you run some back tests on last year and show us the results.
It can't be said/explained any better than this.
201-215 +2.40 +CLV
13-17 -2.02 Flat
drum roll? not needed. but here is the result we have been working so hard to make a reality.
95-105 +3.78 -CLV
309 - 337 +4.16 Units Overall
said it before in this thread, not expecting this idea to be accepted or recognized for what it is, a license to print money. as for back testing, no need. adopted this strategy last June. 2,500 bets at this point.
enjoy the ASG...and thank you Fraizer!!!