How to do a manual hedging calculation ?

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How to do a manual hedging calculation ?

I know there are hedging calcuators online but I would like to know how to do a manula calculation. If I backed £100 at a decimal odd of 3.2 and I layed at odds of 2.5, how do i work out the lay stake to always guarantee a profit ? with those 2 odds its is possible to make risk free money. Thank you

Answer 1

Your first bet is 220 to 100. If you can lay at 2.5 this would be 150 to 100. You need then to construct a table, increasing the stakes. Assuming you are betting in units of 10, the table would look like:165 to 110, 180 to 120, 195 to 130,210 to 140 so you pick the lay which satisfies your requirements. If you lay 180 to 120, you win 40 if it wins and 20 if it loses, so you are effectively "on" at 2-1. The optimum lay would be 185.01 to 123.34 which guarantees a win of 34.99 if it wins and 23.34 if it loses which represents the current projected SP of 2.5 ie 6 to4 against. Once you have compiled a table in Excel for every price, which would be simple enough, you refer to it at will. You could do all prices beginning with 2 in worksheet no.2 and all prices beginning with 3 in worksheet no. 3 etc.

To equalise the winnings in either event, allow the bet and lay stake to cancel each other ( 220 to 100 against 150 to 100) so that you have 70 excess to play with. Divide this by 2.5 and you get 28 so you lay 192 to 128 which gives you 28 profit either way. However the best lay, as stated above, is to be "on" at the current price of 2.5 i.e. 6-4 against.  Whether the next calculation is a fluke or not I do not know but if you divide 70 by 1.5 and subtract it from 70, you get 23.34 which is the optimum extra lay stake I calculated above. Try further examples along these lines.

Answer 2

wicked! wicked! jungle is massive.