Doggy Juice: Why hedging your bets is almost always -EV

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January 22, 2021 7:04 PM

The NFL’s version of the Final Four is set and a pair of conference championship games with similar point spreads will determine which two teams square off in Super Bowl 55.

If you’re sitting with a futures ticket on one of the remaining teams, you might be tempted to lock in a profit by hedging the other way this weekend or after the Super Bowl matchup is set. But doing so is usually not a profitable strategy long-term, and on this week’s episode of the Doggy Juice Podcast I explain why.

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I am the fortunate holder of a few Buccaneers futures bets (50-1 and 40-1 to win the Super Bowl and 20-1 to win the NFC) all locked in a few weeks before Tom Brady joined the team. There is obviously plenty of equity in those tickets at this stage of the playoffs, but blindly hedging just to lock in a win isn’t necessarily the way to go.

While value can certainly be found in futures markets, the house hold in such markets is a lot higher than most bettors realize. Coupling that with the fact that you have to keep your money tied up for a prolonged period of time means that futures are, more often than not, a -EV proposition for us bettors.

Data-led picks for Championship Sunday
 

And when one looks to hedge a future that has equity down the line like my Bucs tickets do, they also should be aware of the fact that doing so means they have to jump into the vigorish not once but twice, sacrificing potential EV each time in the process.

But there are exceptions to every rule, and when it comes to hedging, the amount to win can be so substantial that it makes it perfectly reasonable for someone to want to make sure they lock in a profit.

Beat the sportsbooks this weekend
 

After all, if you have a $100 future to win $10,000, for example, and you are one game away from cashing the ticket, would you really want $10,000 riding on that one game? You very well might, but when it comes down to it, life-changing money can certainly shift the equation for a lot of bettors.

So if you’re like me and holding a Tampa Bay NFC future this weekend, there is nothing wrong with a little playback on the Packers moneyline in order to lock in a small profit and make the game a relative freeroll.

Player prop picks for Sunday
 

But you should also understand that playing the other way and locking in that profit means you have to give away more equity to the house in the form of additional vig.

When it comes to hedging futures, there is no one-size-fits-all answer because everyone’s risk tolerance is different. But unless life-changing money is involved, one is likely better off holding onto their tickets until the very end.

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