Basic trading question

mr_agentsmith · Mar 30, 2011

Dear T2W,

I'm new in this forum and have a basic question for you guys:

Trading, resp. hedging: You bet on outcome no. 1 and a certain event happens (e.g. a goal) and you then trade/hedge by either placing on the other outcomes to match the potential win of outcome 1 or in case of exchanges you lay the same bet.

a) is this something a lot of people you do here?
b) isn't there an easier way (or sportsbetting operator) which offers an easier solution for that? like cashing-out your bet with just one click?
c) are you at all concerned about the margins here (which you can calculate if you assume the odds did not change at all)?

Interested to read your replies!

shadowninja · Mar 30, 2011

Are you using Betfair? If so, check out A Geek's Toy. One-click hedging. http://www.geekstoy.com/

Sign up to the forum, tell them I sent you.

It's blindingly good software... and even better, it's free... so donate if you are feeling generous.

mr_agentsmith · Mar 31, 2011

Thanks for the link, but isn't there just a simple betting-website where you can just cash-out your bet? And margins also still apply as you pay for the spread between backing and laying, right?

anley · Mar 31, 2011

The best hedge is to always close your position, simple as that.

mr_agentsmith · Mar 31, 2011

anley said:
The best hedge is to always close your position, simple as that.

What exactly do you mean with "close"? I understand what it means, also know how to do it (see my first post) but I am interested in easier options to do it. Wouldn't it be great if you can just place a bet on a simple betting-website and then "close out" with one-click at the current value?

Do you guys understand what I mean with margin in that particular case? Especially in regular sportsbook you pay a high margin, not simply because the margin is higher but because you essentially pay the margin twice - on the original bet and on the bet(s) required to close out your position. Is this a concern? Is this something you guys take into the consideration of the actual value of closing out?

please advise

anley · Mar 31, 2011

Hedging means this - you fix a price for the future so whatever happens after that fact your price is guaranteed.

For example, you buy Goals at 2.5 it goes to 3.5 and if you hedge at 3.5 it doesn't matter if the price goes to 0 or 99, your price is hedged at 3.5.

Therefore the best hedge is to sell at 3.5. No messing around, no extra commissions.

However, many people think hedging is some sort of nirvana where you hedge your losses, ie if the market moves against you, your position doesn't lose money, but if the market moves in your favour you still reap the rewards. That is of course impossible but it seems to confuse a lot of people because they believe they can have it both ways (not saying this is you).

mr_agentsmith · Mar 31, 2011

anley said:
Hedging means this - you fix a price for the future so whatever happens after that fact your price is guaranteed.

For example, you buy Goals at 2.5 it goes to 3.5 and if you hedge at 3.5 it doesn't matter if the price goes to 0 or 99, your price is hedged at 3.5.

Therefore the best hedge is to sell at 3.5. No messing around, no extra commissions.

However, many people think hedging is some sort of nirvana where you hedge your losses, ie if the market moves against you, your position doesn't lose money, but if the market moves in your favour you still reap the rewards. That is of course impossible but it seems to confuse a lot of people because they believe they can have it both ways (not saying this is you).

I see what you mean.

Where do you actually do all this? Mostly on betfair, or also on traditional operators (willhill, bwin, etc.)?

anley · Mar 31, 2011

I don't sports bet, too easy to lose money. The financial markets are better in my opinion.

Aegist · Apr 27, 2011

mr_agentsmith said:
I see what you mean.

Where do you actually do all this? Mostly on betfair, or also on traditional operators (willhill, bwin, etc.)?

I do arbitrage trading, which is slightly different to trading as I think you mean it, but fundamentally the same sort of thing (just with minimised risk exposure). And from the arbing perspective, you place each side of the trade at wherever you can get the best odds. So we use both exchanges and books.

Basic trading question

mr_agentsmith

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shadowninja

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mr_agentsmith

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anley

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mr_agentsmith

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anley

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mr_agentsmith

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anley

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Aegist

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