Expected move, a term mainly used for stocks, applicable for sports betting
October 31, 2017 3:00 AM
by Bill Krackomberger
There is an interesting similarity between option trading, video poker, poker, sports betting or really anything you can gain an edge in.
Option trading is done based on the expected move (EM) of the stock. EM has no directional bias. EM is based on the implied volatility formula. So you have pros out there looking for inefficiencies in the option prices where (similar to a poker pro) the “pot odds” are in their favor.
Video poker is beaten by pros by using the expected value (EV) after X amount of hands. So let’s say you are going to enter a video poker promotion. You did the math and figured the return on investment to be positive a EV of 102%. You must know your expected range where your bankroll can end up after X amount of hands. The video poker pro most likely uses software or some other program and runs the Monte Carlo trials of X hands. The poker player has online poker where he can play multiple tables at one time and through trial and error better himself.
These concepts are exactly the same as what my team and I do when it comes to sports betting. Just like in option trading, we time our market entry using EM, and we quantify our EV based on likelihood to win and determine how many games we want to take with those advantages. We also can look to our closing line value to determine how much value we won by the amount in which we beat the market.
The point is the homework the sports bettor or pro poker player does is no different than the video poker pro or the option trader pro. They all crunched their numbers, calculated their expected move after a larger quantity of trades or bets to remove randomness. The pros that do this are actually assessing their risk. Each bet or trade they are not overly concerned with since they don’t over bet.
Now, even though all endeavors above are successful, if the game doesn’t suit ones personality, it will result in failure. The anxiety of being in a long draw-down will finally get to an individual.
Look at poker pros for example. That fast type, high stakes game suits them and they can make a million-plus lifetime. But if they move on to trading or video poker, they tend to fail miserably since they are not accustomed to the slow type action. This is a very common result.
I wake up at approximately 7 a.m. every single morning and start running around town around 8. That was the first thing that did not sit well with my two friends. They wanted to “enjoy” the city of Las Vegas, instead of viewing it as an opportunity to make good money through hard work.
I love what I do, I love having an edge and being a grinder just like the other guys do with poker and advantage trading. However, this life is not for everyone.
This week’s picks: Wake Forest +13, FlU +4
Last week: 2-1