Insurance?

[Aner]

I have a spot play that returns 15+% if I restrict bets to horses going off at 8:1 or better. So where's the money? I finally realized I'm paying far too much for insurance. Say my horse goes off at 15:1. Obviously others in the race have a good chance to beat him. Sometimes I play an exacta with a couple of the favored ones on top of my long shot, or there is a 5:1 shot whose looks real good. Another $2 there. It finally dawned on me that I frequently have 20% to 50% of my money betting the long shot will not win. There goes any edge.

Is insurance ever warranted? If so, can the amount of insurance be estimated based on the win bet?

[classhandicapper]

Years ago I used to make the same mistake. I'd often play a bunch of savers over my key horse that cost me money over the long haul. Some combinations probably even had a negative expectation over the long haul. It took me awhile to realize the error of my ways.

There's nothing intrinsically wrong with playing a horse you like underneath a few others. You just want to make sure you aren't using the horse under clear cut underlays. Those are the combinations that destroy value.

As far as playing 2 horses in the same race goes, I think it's OK as long as they are both overlays. The problem here is bet size.

Do you bet your usual unit on each horse?

That has the effect of doubling your usual bet size on one race which could make you uncomfortable or be risking too much on one opinion.

Do you split your usual bet in half and bet the same amount on each?

That feels more comfortable, but you'll find that you cash a lot of those races and have only half as much on the winning horse as you usually bet. That has the potential to screw up your results. For instance, if you happen to do especially well in those races but not so good in others, you might have flat bet profits for the year but a net loss in actual money.

You could also split it other ways like trying to win the same amount no matter which horse wins etc..

Personally, after all these year I am still struggling with that scenario.

[cj]

The only time I can see using insurance is if you just can't handle not cashing tickets on an emotional level. If that is the case, you probably aren't cut out for serious gambling any way.

[Turkoman]

I have a spot play that returns 15+% if I restrict bets to horses going off at 8:1 or better. So where's the money? I finally realized I'm paying far too much for insurance. Say my horse goes off at 15:1. Obviously others in the race have a good chance to beat him. Sometimes I play an exacta with a couple of the favored ones on top of my long shot, or there is a 5:1 shot whose looks real good. Another $2 there. It finally dawned on me that I frequently have 20% to 50% of my money betting the long shot will not win. There goes any edge.

Is insurance ever warranted? If so, can the amount of insurance be estimated based on the win bet?

Aner:

I'm just curious to know how many of those spot plays your method produces on a monthly basis, approximately. Is it possible to say? Thanks in advance.

Turkoman

[classhandicapper]

The only time I can see using insurance is if you just can't handle not cashing tickets on an emotional level. If that is the case, you probably aren't cut out for serious gambling any way.

If the saver wager is still a good value, you can argue for it as a risk management technique.

Suppose you had a 20-1 shot with an expected ROI of 1.30, but there were a few exacta combinations you could play with him second that were worth 1.15.

You'd win more money over the long haul just betting it all to win, but those exacta combinations are still profitable plays. Maybe you'd feel more comfortable mentally not blowing the bet totally in case he gets nipped at the wire for 1st and you could also bet a larger percentage of your bankroll on the race because you have a better chance of cashing something.

It's when you put a favorite that you don't even like much over that long shot and the expected ROI drops to .90 (or whatever) on that combination that you are really screwing yourself

[thaskalos]

If what you mean by "insurance" is the act of sacrificing a minor bet (or bets) for the sake of protecting a larger bet, or a large potential payoff...then I would have to say that it's a bad idea.

I have seen people, who are "live" going into the last leg of a pick-4, practically falling all over themselves trying to hedge their existing bets, in the face of what they consider "hot play" on the board on some other horse(s). Somehow, the idea seldom works out...

That said...I often will structure my superfecta tickets in such a way as to receive some kind of payoff, even if I am somewhat wrong about the race's outcome.

But this happens only under certain circumstances, and it's part of an overall, predetermined betting strategy...not a last-ditch effort motivated by fear.

[Aner]

Aner:

I'm just curious to know how many of those spot plays your method produces on a monthly basis, approximately. Is it possible to say? Thanks in advance.

Turkoman

One year there were 1787 plays. I estimate this was from about 500 race cards.

[Turkoman]

One year there were 1787 plays. I estimate this was from about 500 race cards.

Wow, not bad. That's almost 5 plays per day! With such an abundance of solid plays and a 15% profit, I'd say it's safe to say that no "insurance" is necessary. Just my opinion. Thanks for the answer.

Turkoman

[Light]

Aner

I can't stress enough the monumental impact that a bomb running second will have on your ROI's health and your mental state when you do or don't cover him to run second.

"Insurance" is very important for the health of your ROI when you have a "bomb" as you alluded to. Doing the following procedure with a low priced horse will probably hurt your ROI as previously explained.

I hedge all the time (when I have a bomb). What that does is increases my ROI and hit rate significantly. Let's take the 20-1 shot I had in a 6 horse field recently. Put $10 to win. Going to get back $210 if he wins. Back wheeling him in the exacta cost me $5. He ran 2nd behind a 6-1 speed ball. $1 exacta came back $91.

You tell me. Do you want a profit of ($91-$15 win+cover bet) = $76. Or do you want a $10 loss (straight win bet)? Do the ROI math.

Or say my horse won. I would have gotten back $210 - $15 instead of -$10. Like that $5 difference is really going to be a huge impact on my ROI. There are other ways you could lose that $5 insurance. For example:

The bomb horse could have easily taken a hit in odds by the time the race went off. That would've cost me way more than the $5 insurance. Or, I could have randomly put $15 to win on him instead of $10 and lost. There goes your " cheap insurance" money. Big deal.

The point is the "insurance" bet is almost insignificant in amount but makes a significant impact towards a positive ROI and mental health, when you are dealing with a bomb.

[Aner]

Wow, not bad. That's almost 5 plays per day! With such an abundance of solid plays and a 15% profit, I'd say it's safe to say that no "insurance" is necessary. Just my opinion. Thanks for the answer.

Turkoman


It seems there is a fly for every ointment, and the fly here is low hit rate that hovers around 5%. Sure it gets a lot of the horses paying $50+, but even at 5 bets a day you can strike out for days in a row. I simply don't have the patience to wait for these plays to hit.

Don't think Dave will mind if I quote a statistic from " Percentages and Probabilities, 2012". Based on over 200,000 sprint claiming races, if one bet to win every horse with odds 16 and higher, he would hit only 6.6% of the races resulting in about a 40% loss of purse. Obviously, my picks do not include most of the horses at these high odds.

I think fishing in "super high odds" waters might be a place where profits can still be had. Whales cannot fish here because large bets would devastate the odds. Most handicappers dislike the long run-outs so much they don't cast their nets here. Wish I had the patience to bet these picks only.

[Turkoman]

It seems there is a fly for every ointment, and the fly here is low hit rate that hovers around 5%. Sure it gets a lot of the horses paying $50+, but even at 5 bets a day you can strike out for days in a row. I simply don't have the patience to wait for these plays to hit.

Don't think Dave will mind if I quote a statistic from " Percentages and Probabilities, 2012". Based on over 200,000 sprint claiming races, if one bet to win every horse with odds 16 and higher, he would hit only 6.6% of the races resulting in about a 40% loss of purse. Obviously, my picks do not include most of the horses at these high odds.

I think fishing in "super high odds" waters might be a place where profits can still be had. Whales cannot fish here because large bets would devastate the odds. Most handicappers dislike the long run-outs so much they don't cast their nets here. Wish I had the patience to bet these picks only.

Aner, patience is extremely important. I have one that produces about one a day, but I don't mind. I prefer very few winning ones, rather than play too many and end up like 98% do.

[Kevroc]

I have seen people, who are "live" going into the last leg of a pick-4, practically falling all over themselves trying to hedge their existing bets, in the face of what they consider "hot play" on the board on some other horse(s). Somehow, the idea seldom works out...


This is sooo true and it is near impossible to not give in to the temptation to bet against yourself when staring at a board full of will pays that look nice... save for a few lowish numbers that "scare" you.

I mean.. if you are sitting on some astronomical payoffs compared to your investment.. there are some obvious "sanity" hedges that are no-brainers. I mean.. plunking down a few measly bucks on some really long bombs may be -EV bets in a vaccuum but, when you are sitting on big money, they are easily +EV in the big picture.

It's the middling ones that are trouble. You have to ask yourself why you played the serial bet in the first place if when you get to the threshold of victory.. you bet against yourself.

Bankroll has a lot to do with it, imo. If you played more than just the pick four pool, you wouldn't be scared into making these -EV bets.

Most horizontal players do not do this.

Consider a pick four sequence that has two races in it where you don't like the favorite. You manage to beat the favorite with a $40 horse and a $30 horse. Now you are sitting on the last leg and alive to the fave and second choice. The rest of the field are bombs and you could throw a few bucks down at small risk/large reward... but, the third and fourth choices are looming.

You do not like these horses on paper but, don't want to waste the $40 and $30 winners you "had" earlier.

Well... if you bet those races individually as well, you wouldn't have this dilemma. The win money would be in your pocket and you wouldn't be frightened into making sizable win bets on horses you don't like.

Could you "lock" in a profit betting those horses? Yeah, sure but at what cost? You may win the day... but, you are theoretically throwing dollars down the drain.

[castaway01]

This is sooo true and it is near impossible to not give in to the temptation to bet against yourself when staring at a board full of will pays that look nice... save for a few lowish numbers that "scare" you.

I mean.. if you are sitting on some astronomical payoffs compared to your investment.. there are some obvious "sanity" hedges that are no-brainers. I mean.. plunking down a few measly bucks on some really long bombs may be -EV bets in a vaccuum but, when you are sitting on big money, they are easily +EV in the big picture.

It's the middling ones that are trouble. You have to ask yourself why you played the serial bet in the first place if when you get to the threshold of victory.. you bet against yourself.

Bankroll has a lot to do with it, imo. If you played more than just the pick four pool, you wouldn't be scared into making these -EV bets.

Most horizontal players do not do this.

Consider a pick four sequence that has two races in it where you don't like the favorite. You manage to beat the favorite with a $40 horse and a $30 horse. Now you are sitting on the last leg and alive to the fave and second choice. The rest of the field are bombs and you could throw a few bucks down at small risk/large reward... but, the third and fourth choices are looming.

You do not like these horses on paper but, don't want to waste the $40 and $30 winners you "had" earlier.

Well... if you bet those races individually as well, you wouldn't have this dilemma. The win money would be in your pocket and you wouldn't be frightened into making sizable win bets on horses you don't like.

Could you "lock" in a profit betting those horses? Yeah, sure but at what cost? You may win the day... but, you are theoretically throwing dollars down the drain.

I think the problem with this scenario is that most of the time the $30 or $40 winners we have in the Pick 4 sequence aren't horses we like enough to bet individually to win. In the situation you present where you don't like the favorite in a race, maybe you bet five other horses in that race in the Pick 4 and got lucky with a $40 winner. That situation is hard to cover with win bets though, so it's tough to blame the player for ending up only being alive with the Pick 4 and feeling vulnerable in that last leg. The best way to get longshots in your Pick 3 or 4 is, understandably, beating vulnerable favorites, but it's not as easy to have a strong opinion on good-odds horses in every leg (unfortunately).

However, if you're saying your key horses (horses you are singling) are frequently winning and paying $30 or $40 in races where you're beating vulnerable favorites yet you only bet those horses in the Pick 4, then yes, that's a major error that needs to be rectified immediately. Then back up the Brink's truck for your profits.

I think sometimes insurance is necessary for psychological well-being, even if it's not the best financial move. If it keeps you from losing your focus for the next two weeks because you collected nothing when you could have won a substantial amount, then in select situations it's worth it. Overall, you have to have confidence in your picks, but there are scenarios when you can back yourself up a bit with insurance (like the Pick 4s mentioned earlier).

[thaskalos]

I think sometimes insurance is necessary for psychological well-being, even if it's not the best financial move. If it keeps you from losing your focus for the next two weeks because you collected nothing when you could have won a substantial amount, then in select situations it's worth it. Overall, you have to have confidence in your picks, but there are scenarios when you can back yourself up a bit with insurance (like the Pick 4s mentioned earlier).

I agree with you, it can be psychologically damaging, at least for a short while, to narrowly miss out on a huge super-exotics payoff.

Here is what I have experienced from my own adventures in this aspect of the game:

When you get to the last leg of the aforementioned pick-4, and you are only alive to one or two of the horses in the field...then, in most cases, you have quite a lot of ground to cover in your attempt to "secure" a profit in the race, in the event the pick-4 goes wrong.

After all...are we trying just to recoup the cost of our bet...or are we trying to make a decent profit overall?

If we make a calculated effort to secure a decent profit overall in this case...then we have to be prepared to lose BOTH the original pick-4 bet AND the supplemental "insurance" bet...and that can be even more psychologically draining.

If, on the other hand, we have half the field covered with our original pick-4 bet in the last race...then I have to say that hedging in this spot is based on unreasonable fear.

The regular pick-4 player faces this situation pretty often...and soon learns to deal with it.

The infrequent pick-4 bettor gets an education on the heartache that is the super-exotic bettor's constant companion...:)

[Robert Fischer]

If you are playing with cash-in-hand HEDGE.

Playing with a bankroll do not hedge unless the willpay is very large or your opinion has honestly changed in the last leg.

[Robert Fischer]

There are also ways to bet multi race wagers where you design the wager for the purpose of hedging on the last leg.

[acorn54]

i second cj's observations. you probably are not wired to be a gambler if you have to seek out "insurance".

[JimG]

Insurance underscores the need of a horse player to win a race as opposed to winning at the races.

Jim

[Light]

Using a broad brush to paint hedging as negative is kind of narrow minded.

I gave an example of how hedging with bombs on win bets can be quite profitable.

In a pk4,when alive in the last leg,the only reason I hedge is because I overlooked a horse for one reason or another that I did not include and now really like him. Nothing wrong with that. It's a win-win situation.

But hedging in a the last leg of a pk4 because I either have no confidence in my picks or really have no clue who will win this race will only make things worse.In this case I agree with those against hedging.

But people here are not making the distinction of when hedging is a good thing and when it's not.

Eating is a good thing. But sometimes it's not. It's not always one way. Nothing in horse racing is set in stone either.

[classhandicapper]

I think this is simpler than it's being made out to be.

If you can hedge with bets that are profitable in their own right, then it's mathematically OK to do so but may not be ideal for maximizing profits.

If you are hedging with bets that are unprofitable in their own right strictly for the mental satisfaction of cashing a bet, then you are costing yourself money over the long haul.

You should rarely if ever do the second one.

[castaway01]

Insurance underscores the need of a horse player to win a race as opposed to winning at the races.

Jim

Eh...maybe. However, if hedging gets you $4000 back when it would otherwise be $40,000 or $0, it's not necessarily a bad move. We're not machines and bad beats can put us on "tilt", as they used to say, so if you can prevent that it's not the worst idea. There are a lot more damaging things that gamblers do than this one, and it's not as cut and dried as it might seem.

[castaway01]

I agree with you, it can be psychologically damaging, at least for a short while, to narrowly miss out on a huge super-exotics payoff.

Here is what I have experienced from my own adventures in this aspect of the game:

When you get to the last leg of the aforementioned pick-4, and you are only alive to one or two of the horses in the field...then, in most cases, you have quite a lot of ground to cover in your attempt to "secure" a profit in the race, in the event the pick-4 goes wrong.

After all...are we trying just to recoup the cost of our bet...or are we trying to make a decent profit overall?

If we make a calculated effort to secure a decent profit overall in this case...then we have to be prepared to lose BOTH the original pick-4 bet AND the supplemental "insurance" bet...and that can be even more psychologically draining.

If, on the other hand, we have half the field covered with our original pick-4 bet in the last race...then I have to say that hedging in this spot is based on unreasonable fear.

The regular pick-4 player faces this situation pretty often...and soon learns to deal with it.

The infrequent pick-4 bettor gets an education on the heartache that is the super-exotic bettor's constant companion...:)

Can't argue with you---it's a fine line. I am just saying it's not ALWAYS dumb or a bad move, but sure, you have to be able to handle that if you're going to spend your life betting Pick 4s (not to mention Pick 5 or Pick 6).

There's a reason that I have switched to mostly win betting, and I think those near-miss Pick 4s might be it. I went through years where everything I did seemed to break right, but then the next year when I had a bunch of near misses, I figured it was better to change what I was doing. However, that's why I advocated the occasional insurance---I am human and I know that the near misses were affecting my judgment.

Also, and I know this might be a foreign concept to top-of-the-line gamblers, but there were tracks where I had a decent but not perfect feel for what was happening. I could get to the last leg and be alive with two horses but then the glaring third option would be sticking out and seemed logical to "insure". Again, it's probably best to ignore these, but if $200 to get back $1000 also kept me from getting frustrated and throwing away $1000 the next day, I deemed it worth it. Stronger and wiser gamblers wouldn't, but that's why they're pros and I work full time. :D

[maddog42]

Hedging usually dilutes your profit. If I have a horse that is 15-1,and should be 6-1, then a straight $2 exacta from the favorite to my horse is still an overlay, usually. Cramer calls this the "exacta as place" bet. He says it has proven better than a place bet over the long haul. I agree.

[Light]

Hedging only dilutes your profit in a utopian world where everything you bet either wins or is out of the money.Otherwise in a real world it can increase your overall ROI since our choices run 2nd more than win which we all know is a fact.

Here's the math.This only applies in betting "bombs". Using $10 to win and $5 in exacta hedging bets to cover my bomb in case he runs 2nd.

Lets say I hedge 100 of my bombs to run 2nd @$5 each hedge. Investment $500. Lets say 20 of them run second, (only 10 winning). The minimum payout I would expect is $50 for $1. That's with one of the first 2 chalks winning in a modest size field. But lets stay conservative and say our payout is on average $50. $50*20hits =$1000. Investment is $500. Profit is $500 from hedging.It has taken nothing away from my win bets. It has only increased my overall ROI and my sanity because now I am not hitting only 10% to win but 30% to win or place.

The point is as long as you make a profit from the type of bet you make, even if it is betting against another bet you made,it is NOT hedging,it is a form of Dutching. And there are ways as described above that it does NOT DILUTE, but INCREASES profit.Yes,the world is not flat.

[sovereign]

I don't like hedging. It means you are second-guessing yourself. If you are second-guessing and/or indecisive, then the bet should not have been made in the first place.

[Jeff P]

Are you keeping records? If you are - and if you have put some thought into the way your records are set up - chances are answers to the types of questions raised in this thread aren't that tough to come by.

One piece of my own wager history is a data field designed to capture the reason I have for making each bet. (In JCapper, this is called a short description.) The shortDescription field in the WagerHistory table stores a user defined string of text characters. The player has the ability to set up unique short description codes ahead of time - one short description for each reason the player has for making a bet. Then during record keeping, the player can tag each bet with the appropriate short description code.

This enables generation of wager history reports that allow the player to evaluate performance of the reasons each bet was made. (The player can evaluate wager history with the data broken out by the many other data points captured in the WagerHistory table as well.)

Bets made for like reasons can be reported on separately. Once sufficient wager history has been amassed, strong reasons for making a bet are readily identified (as are weak reasons.) From there, corrective action can be taken as needed.

I discovered (at least as relates to my own betting) that hedge or insurance bets were costing me money. Once I began analyzing my own wager history this fact became clear to me. I cast the psychological reasons I had for hedging aside and stopped making hedge bets. From that point forward, the bottom line saw noticeable improvement.

For me that was the right move to make.

Another player structuring p3, p4, p5 etc. tickets differently than myself - and structuring insurance tickets differently, and doing record keeping differently too - might very well arrive at a completely different conclusion about hedging than I did.



-jp

.

[cj]

I discovered (at least as relates to my own betting) that hedge or insurance bets were costing me money. Once I began analyzing my own wager history this fact became clear to me. I cast the psychological reasons I had for hedging aside and stopped making hedge bets. From that point forward, the bottom line saw noticeable improvement.



I think the vast majority of people will find the same exact thing you did if they keep accurate records. I've also never found that hedging by playing your choice in exactas in the two hole was any better than betting the horse to place long term, UNLESS you could confidently throw out a few low priced horses on top. I find those situations pretty rare.

[Maximillion]

I think the vast majority of people will find the same exact thing you did if they keep accurate records. I've also never found that hedging by playing your choice in exactas in the two hole was any better than betting the horse to place long term, UNLESS you could confidently throw out a few low priced horses on top. I find those situations pretty rare.



I agree with this...... but if your bet is a potential "bomb" (as a previous poster mentioned) imho that calls for either a back-up place bet or some kind of "insurance" exacta play.....

Would be painful to have insights on a 25-1 shot and collect nothing.....
(runs second)

[acorn54]

in my research betting to place on "bombs" returns a negative r.o.i.
plus the fact in the place pool you will almost always be sharing with a lower odds horse thus getting the short end of the stick.

[Maximillion]

in my research betting to place on "bombs" returns a negative r.o.i.
plus the fact in the place pool you will almost always be sharing with a lower odds horse thus getting the short end of the stick.


I guess it would all come down to the % of these "bombs" you have running second and how you felt about the favorite in the given race......

(whether to place bet or exacta play)

[Light]

Are you keeping records?
.

If you're asking me, no, not on the bomb running second. Because I don't need to. The reason is the exacta payoffs are so healthy,it's a no brainer that it is a positive ROI with the small investments I make for them to run second.

As Maximillion pointed out, I am talking about bombs (12-1 and up). I am not talking about covering a 3-1 shot or something like that. Also contrary to what acorn54 said, my bombs have a much higher winning percentage compared to your run of the mill bombs who have a much lower win percentage. Of course finding these gem plays is pretty limited.

Jeff P. I don't use your software, but I think you have some sort of "modeling" in your software where you might be able to find a subset of factors for high priced horses that will win or place at a higher percentage than the norm for this group. From here you can then tell that betting $10 to win and a $1 exacta back wheel to 5 or 6 horses of your choosing should produce a positive ROI in both the win and "hedge" categories.

[Robert Fischer]

I would rarely hedge against a win bet.

If you want to box him with the favorites in an exacta or trifecta, that makes some sense, because that exacta or tri could actually be a parallel profitable play given the large exacta probables(depending on field size/pool distribution), the high% of probability and how much you love your win-longshot to run well.

In general, single race wagers are done for a reason and although the "hedge"(parallel play) may be a profitable play in isolation, when following a single race wager it will have to be in line with that wager and often takes a hit in value below the playable level.

You can also bet a 2nd horse to win, which in effect buys some hit% for a decreased value.

I was more thinking along the lines of sitting on an unusually large willpay for a multi-race wager.

[Jeff P]

If you're asking me, no, not on the bomb running second. Because I don't need to. The reason is the exacta payoffs are so healthy,it's a no brainer that it is a positive ROI with the small investments I make for them to run second.

As Maximillion pointed out, I am talking about bombs (12-1 and up). I am not talking about covering a 3-1 shot or something like that. Also contrary to what acorn54 said, my bombs have a much higher winning percentage compared to your run of the mill bombs who have a much lower win percentage. Of course finding these gem plays is pretty limited.

Jeff P. I don't use your software, but I think you have some sort of "modeling" in your software where you might be able to find a subset of factors for high priced horses that will win or place at a higher percentage than the norm for this group. From here you can then tell that betting $10 to win and a $1 exacta back wheel to 5 or 6 horses of your choosing should produce a positive ROI in both the win and "hedge" categories.

Models/UDMs along the lines of what you are describing are easy enough for me to develop and test. Over the years I've analyzed literally hundreds of them.

These results are for horses selected by one of my active UDMs - but only those horses that went to post at odds of 12-1 and higher:


Data Summary Win Place Show
Mutuel Totals 1831.20 1398.10 1205.60
Bet -1264.00 -1264.00 -1264.00
Gain 567.20 134.10 -58.40

Wins 47 99 158
Plays 632 632 632
PCT .0744 .1566 .2500

ROI 1.4487 1.1061 0.9538
Avg Mut 38.96 14.12 7.63


The place column IS profitable.

But also note that total money returned in the win column is greater than total money returned in the place column. Total money returned in the place column is greater than total money returned in the show column.

This same phenomenon holds true in the exacta pool as well. Playing the model's 12-1 and higher selections OVER other horses in the race produces profits greater than what can be had by playing the model's selections UNDER other horses in the race.

Here is what the exacta matrix looks like for the same data sample:

Exacta Matrix UPR Rank = 1

Description Hits Plays Pct Mutuel Bet Gain Roi
----------------------------------------------------------------------------------
UPR1/UPR2 000010 000632 0.0158 002190.20 -001264.00 000926.20 1.7328
UPR1/UPR3 000009 000632 0.0142 002185.70 -001264.00 000921.70 1.7292
UPR1/UPR4 000003 000632 0.0047 000503.60 -001264.00 -000760.40 0.3984
UPR1/UPR5 000006 000632 0.0095 001118.80 -001264.00 -000145.20 0.8851
UPR1/UPR6 000010 000629 0.0159 002097.00 -001258.00 000839.00 1.6669
UPR1/UPR7 000002 000604 0.0033 000650.60 -001208.00 -000557.40 0.5386
UPR1/UPR8 000004 000503 0.0080 001909.30 -001006.00 000903.30 1.8979
----------------------------------------------------------------------------------
UPR1/X 000044 004264 0.0103 010655.20 -008528.00 002127.20 1.2494


Description Hits Plays Pct Mutuel Bet Gain Roi
----------------------------------------------------------------------------------
UPR2/UPR1 000013 000632 0.0206 000970.90 -001264.00 -000293.10 0.7681
UPR3/UPR1 000010 000632 0.0158 001287.90 -001264.00 000023.90 1.0189
UPR4/UPR1 000006 000632 0.0095 000970.90 -001264.00 -000293.10 0.7681
UPR5/UPR1 000006 000632 0.0095 000953.80 -001264.00 -000310.20 0.7546
UPR6/UPR1 000006 000629 0.0095 000845.40 -001258.00 -000412.60 0.6720
UPR7/UPR1 000005 000604 0.0083 000281.40 -001208.00 -000926.60 0.2329
UPR8/UPR1 000004 000503 0.0080 001742.40 -001006.00 000736.40 1.7320
----------------------------------------------------------------------------------
X/UPR1 000050 004264 0.0117 007052.70 -008528.00 -001475.30 0.8270


In the exacta pool, playing horses selected by the model (it's always the top UPR horse because of the way the model is constructed) OVER the 2nd through 8th ranked UPR horses in each race outperforms playing horses selected by the model UNDER the 2nd through 8th ranked UPR horses in each race. This effect isn't limited to just this model. It is true for nearly all of the longshot models that I have tested.



Ok, Q&A Time...

Q. Given the above, what wagering strategy generates the greatest profit for the player over a significant time horizon?

A. Two units to win?

B. One unit win and one unit place?

C. Two units place?

Unless unit size is so large that betting 2 units to win negatively impacts the win pool, the correct answer is A.

Put another way: If I have 2 units to bet and I opt for strategy B (which involves hedging) as opposed to strategy A... Choosing strategy B over strategy A every time a playable race comes up causes me to earn less money over a sizable series of races than I otherwise could have.

In business this is sometimes referred to as an opportunity cost.

There's also something called the law of large numbers and I think it applies here. The longer the series of races that a player insists on using strategies B and C instead of using strategy A: The more likely it becomes that avoiding strategy A will end up costing the player money.

Light, I'm not saying that hedge betting is wrong. However, I am saying that hedge betting is not for me.

There IS one valid reason (mathematically) I can think of where hedge betting makes sense. I'll try to come back and post it later if no one else does.


-jp

.

[Kevroc]

I think the problem with this scenario is that most of the time the $30 or $40 winners we have in the Pick 4 sequence aren't horses we like enough to bet individually to win.


I understand AND agree with you.

It's just that when you look at your p4 tickets.. if you looked at the cost of adding that long horse in there... for example take a caveman ticket 5 x 3 x 3 x 3 with a 19:1 and 14:1 shot being two of the first leg runners.. those additions are raising the cost of the ticket from $81 to $135. An increase of over 50%. Surely, they are worth something in the win pool. Even a small amount would lessen your "need" to devise a hedge plan for sanity reasons. If you liked the price horses enough to add to a sequence, they should be worth some type of wager in the win pool (especially at those inflated odds)

I also agree with what Robert said above. There are ways to structure your play where hedging is part of the plan. I do it all the time. I am not against hedging at all. I merely tried to illustrate that hedging the last leg out of fear (making negative expectation bets) can hurt you long term.

My main point was that some players approach the races not properly rolled, and they dip into these pools and these pools only. That could lead to some scared play and not very well-thought out last minute hedges.

Over the course of time, this is a leak.

[phattty]

hedging your long payout for multis ending with a bomb?

IMO you played the bomb because you didn't like the lower price beasts,

so... my hedge here is too scatter a few longer priced horses over my bomb as i already expect a surprise winner in the race...not much $$$ required to make the place finish of your Bomb quite rewarding

expected chaos generally leaves anything under 10-1 trailing home

[Light]

Light, I'm not saying that hedge betting is wrong. However, I am saying that hedge betting is not for me.



I don't think we are that far apart.

You do acknowledge that there is a subset of high priced horses that are profitable.That is the main hurdle to seeing my point.

There may be a misunderstanding of what I am saying/doing about playing the bomb 2nd. To clarify. If I play $10 to win and $6 with the bomb 2nd in an exacta, I am NOT removing those $6 from the win bet. I would simply not bet them.

What I am saying is there is an exacta place resource that is going untapped. By using the bomb second, I am maximizing profits instead of the misconception that I am diluting profits.

It's like you find a small oil well. Then you notice this oil well feeds another, smaller oil well. Both are profitable. To say that I will only stick with the bigger oil well because the other oil well may dilute my profits is absurd. Why not take advantage of the 2nd oil well too.Why leave an additional resource untapped.

[pondman]

Play it as it is. Unless you can get your win percent higher.

[Jeff P]

I don't think we are that far apart...

There may be a misunderstanding of what I am saying/doing about playing the bomb 2nd. To clarify. If I play $10 to win and $6 with the bomb 2nd in an exacta, I am NOT removing those $6 from the win bet. I would simply not bet them.

What I am saying is there is an exacta place resource that is going untapped. By using the bomb second, I am maximizing profits instead of the misconception that I am diluting profits.

No. We're not that far apart.

What I'm saying is this:

If I have $16 to bet on a live longshot in a given race, a review of my own wager history tells me the following:

I am better off (in the long run) betting the entire $16 on the horse to win the race outright (vs. betting $10 on the horse to win the race and using the remaining $6 to make a hedge/insurance bet.)

Hey, to each his own!


-jp

.

[pondman]

An exacta:

(Win % 1st * Win % 2nd)/ time

It's not your ROi that's important. It's having a hit ratea high enough. Some people single. Some people use combinations .

If you catch the first leg at 40% and the second leg at 40%, then you'll win 16% of your exacta. You have to do the math, and see if you are on par. Some enjoy it, others don't it and don't play it. I don't think you have enough of a margin on the 1st leg.

[Robert Fischer]

hedging your long payout for multis ending with a bomb?

IMO you played the bomb because you didn't like the lower price beasts,

so... my hedge here is too scatter a few longer priced horses over my bomb as i already expect a surprise winner in the race...not much $$$ required to make the place finish of your Bomb quite rewarding

expected chaos generally leaves anything under 10-1 trailing home

This is why it can be favorable to either use a couple lower priced horses in the final leg with the bomb, or try to find a sequence where that bomb is not the final leg. Can't always be done, and even when it can - you still may want to play that leg in the rolling or overlapping sequences. :ThmbUp:

[Light]

I am better off (in the long run) betting the entire $16 on the horse to win the race outright (vs. betting $10 on the horse to win the race and using the remaining $6 to make a hedge/insurance bet.)



If you can live with that low hit rate,go for it. I need multiple sources of income at a greater hit rate for sanity. At a low hit rate, the rate of run outs is longer and the psychological drought will do you in resulting in abandoning the process.That's why I do not bet the entire $16 on one thing. I diversify my portfolio like a mutual fund.

[Robert Fischer]

If you can live with that low hit rate,go for it. I need multiple sources of income at a greater hit rate for sanity. At a low hit rate, the rate of run outs is longer and the psychological drought will do you in resulting in abandoning the process.That's why I do not bet the entire $16 on one thing. I diversify my portfolio like a mutual fund.

racetrack is a terrible place to buy insurance

[Light]

It's not insurance.

[Maximillion]

Models/UDMs along the lines of what you are describing are easy enough for me to develop and test. Over the years I've analyzed literally hundreds of them.

These results are for horses selected by one of my active UDMs - but only those horses that went to post at odds of 12-1 and higher:


Data Summary Win Place Show
Mutuel Totals 1831.20 1398.10 1205.60
Bet -1264.00 -1264.00 -1264.00
Gain 567.20 134.10 -58.40

Wins 47 99 158
Plays 632 632 632
PCT .0744 .1566 .2500

ROI 1.4487 1.1061 0.9538
Avg Mut 38.96 14.12 7.63


The place column IS profitable.


There IS one valid reason (mathematically) I can think of where hedge betting makes sense. I'll try to come back and post it later if no one else does.


-jp

.


This is eye opening stuff....

In your sample the win roi is over 30% vs. place, despite double the hit rate.....

I only bet to place on a "bomb" when I feel the race is up for grabs,and cant get a handle on the other contenders....I usually opt for a few exacta boxes as a way of trying to take more out of a race.

Of course everyones records are different, but maybe I ought to re-think that approach.

Would love to hear the situation wher hedge betting makes sense?

cheers

[rubicon55]

This is eye opening stuff....

In your sample the win roi is over 30% vs. place, despite double the hit rate.....

I only bet to place on a "bomb" when I feel the race is up for grabs,and cant get a handle on the other contenders....I usually opt for a few exacta boxes as a way of trying to take more out of a race.

Of course everyones records are different, but maybe I ought to re-think that approach.

Would love to hear the situation wher hedge betting makes sense?

cheers

Jeff's, stats verifies everything I have read on place betting longshots, statiscally over the long haul it is a losing proposition - it is better to go for the win. I have faulted on my self doing the same thing. I think it is fear driven and not fact driven based on my personal expierence IMO. I think the only place that may vaugely or possibly warrant hedging is a place bet is possibly on a bridgejumper that you think might fail. Robert Goren may know more about the exact stats about bridgejumpers that he has noticed.

[Light]

At Keenland today,there were 3 bombs that ran 2nd. Lets say you had them hypothetically. All 12-1 and up.

Using my $6 on those "bombs" that placed would return you $144 in place money in those 3 races.(Not my method)

Using my $6 to cover those "bomb" horses with the top 6 betting choices on top in $1 exactas returned $444 in those 3 races.(My method)

A $300 improvement using the exacta as the place bet.

I don't know about Jeff P's data,but these results though small are typical for Keenland and other tracks with large and competitive fields with their bombs. Maybe he didn't have these types of bomb horses in his model. But it's not those horse's job to fit his model. Its the other way around.

[erikeepper]

I have not read all the answers (sorry) but actually you usually maximize your bankroll growth (NOT ROI, but $$$$) according to Kelly IF you hedge in a situation where your main play is high odds overlay. Of course I assume the hedge if negative ROI but not very much so. If they are both overlays, obviously you play both.

Create an excel-solver kelly calculator and you will see this is true :)

[Seabiscuit@AR]

Insurance or saver bets on negative ROI horses are a bad idea

If your main bets keep winning then the insurance bets will at least give you extra winners even if they reduce your ROI

The killer with insurance bets is what happens if the main bets that worked in the past stop working in the future. Then the insurance bets will cause a lot of damage even if the main bets have a 0% ROI (ie break even). If the main bets start to lose then the insurance bets will dig an even deeper hole. In other words the insurance bets will fail when you need them the most

[rubicon55]

At Keenland today,there were 3 bombs that ran 2nd. Lets say you had them hypothetically. All 12-1 and up.
Using my $6 on those "bombs" that placed would return you $144 in place money in those 3 races.(Not my method)

Using my $6 to cover those "bomb" horses with the top 6 betting choices on top in $1 exactas returned $444 in those 3 races.(My method)

A $300 improvement using the exacta as the place bet.

I don't know about Jeff P's data,but these results though small are typical for Keenland and other tracks with large and competitive fields with their bombs. Maybe he didn't have these types of bomb horses in his model. But it's not those horse's job to fit his model. Its the other way around.

I do not know you and it looks like you have been here on this board much longer than I have. Database cappers are well aware that a 12-1 shot wins about 7.7% of the time and that decreases linearly as the odds increase. In the place position I doubt the percentage gets much better. There is a tendency in human nature that anyone who is actually making consistent profits or huge ROI on long shots at this game is most likely keeping it to themselves and do not see the need to tout it. There would appear be no logical reason to do so otherwise. If this is not the case then why propose a black box that does not exist – at least it appears that way in your current and past postings. Please do not post your figures or results as they are too easily back fitted to appear to work. I only decided to comment after a long deliberation only for the sake of new horse players IMO there is no road to El Dorado – having an ROI of 10-15% is outstanding and requires hard work which many posters here do and probably even higher – anything above that is phenomenal. I am not talking about the guy who wagers a major bet once or twice during a specific track season – that is not serious capping IMO. A statistical record over many races IMO is more valid and worthy of respect. The real players IMO are capping every day and finding their spots and plays. I am not a full time player and I respect those that make the effort daily – it takes a lot of hard work and sacrifice. If I am totally wrong on making this call then that is a bad mark on me but if this is not the case then red boarding or alluding to a methodology that is the holy grail is considered bad handicapping etiquette IMO. Why waste all the effort and energy to defend imaginations of a person who aspires to have a positive ROI like everyone else is trying to do – it seems to be a disservice to all concerned. Not meaning to offend or project negativity just expressing myself which thankfully is allowed on this board. Best regards and best of luck to you.

[erikeepper]

Insurance or saver bets on negative ROI horses are a bad idea



This is not always the case. See above.

[citygoat]

if you're at the track and you have a limited bankroll a saver to stretch to a few more races maybe but if you are online gambling pump your picks and find other races to stretch your bankroll

[Light]

If this is not the case then why propose a black box that does not exist.

I haven't. In fact the man you agree with (JeffP) agrees with me. That there is money to make with long shots.The only difference is he says to place it all to win.
Please do not post your figures or results as they are too easily back fitted to appear to work.

ALL results are from the past including Jeff P's. Therefore they are all back fitted.Or do you have a clairvoyant chart?

I only decided to comment after a long deliberation only for the sake of new horse players IMO there is no road to El Dorado

I wouldn't worry about "Newbies",if I were you. I'd worry about my own ROI.

red boarding or alluding to a methodology that is the holy grail is considered bad handicapping etiquette IMO.

The Kee results I posted were for illustrative purposes to show the power of betting the exacta over the place bet. This is old stuff written in handicapping books years ago and especially alluded to by Mark Cramer. Check out his books and write a letter of complaint to him.


Why waste all the effort and energy to defend imaginations of a person who aspires to have a positive ROI like everyone else is trying to do – it seems to be a disservice to all concerned.


I have news for you. You only think you aspire to have a positive ROI. It's clear you do not believe you can do it, or you believe it takes eons of time. Therefore you will never achieve what you think you want because it is at odds with what you really believe .

[BELMONT 6-6-09]

I know this topic is 11 years old, however, i believe it is still a divided topic among horseplayers.

I am a serious win bettor looking to find value in my selection and this process leads to a very selective operation. When i am working a race and i have my value selection that i have confidence in after performing my work i wager. On rare occasions when my work produces a second horse that i feel strongly about i wager to win on my key horse and use an exacta box with the two horses.

[classhandicapper]

I know this topic is 11 years old, however, i believe it is still a divided topic among horseplayers.

I am a serious win bettor looking to find value in my selection and this process leads to a very selective operation. When i am working a race and i have my value selection that i have confidence in after performing my work i wager. On rare occasions when my work produces a second horse that i feel strongly about i wager to win on my key horse and use an exacta box with the two horses.

If both horses are an overlay to win both exacta combinations are very likely to be an overlay. So that's almost always fine. In fact, it usually provides excellent value.

It's when you start putting underlaid favorites on top of your key horse that you tend to produce negative expectation combinations.

If you like some 10-1 or 15-1 shot, think the favorite is a major contender, and don't really hate the price on him, the combo with the favorite on top will typically still be usable.

If you like some 10-1 or 15-1 shot, think the favorite can win, but is a significant underlay, I'd probably avoid that combination.

If you like some 3-1 or 4-1 shot putting some mildly overbet favorite over it will rarely be a good idea.

Making saver wagers trying to hit more tickets cost me a lot of money when I was young. Think in terms of value. These are just exactas.

[BELMONT 6-6-09]

If both horses are an overlay to win both exacta combinations are very likely to be an overlay. So that's almost always fine. In fact, it usually provides excellent value.

It's when you start putting underlaid favorites on top of your key horse that you tend to produce negative expectation combinations.

If you like some 10-1 or 15-1 shot, think the favorite is a major contender, and don't really hate the price on him, the combo with the favorite on top will typically still be usable.

If you like some 10-1 or 15-1 shot, think the favorite can win, but is a significant underlay, I'd probably avoid that combination.

If you like some 3-1 or 4-1 shot putting some mildly overbet favorite over it will rarely be a good idea.

Making saver wagers trying to hit more tickets cost me a lot of money when I was young. Think in terms of value. These are just exactas.

Class i will never use more than one exacta combination with my key horse as the purpose of the exacta box is to protect the win bet and add a combination that will make money (value). I play to win not to make insurance bets as there is no such thing as insuring a wager imo.