The Advantage of the Over Under Bet

Before I created my NFL Predictive Model for forecasting the outcomes of NFL games, I always thought betting the Over/Under was just not all that interesting. What really matters is who is going to win the game, right? Coming off NFL week six where my over/under bet units were 5/5 (and my line bet units were only 3/6) I thought it might be a good time to sing the praises of the over-under bet.

The over bet is one bet that can be put in the bag before the game is over. In fact, during the Saints vs Giants game I’d already won one of my best bets before half-time! The under can start looking pretty sure by midway through the fourth quarter. Recently examples include under in the Bills vs Browns and under in the Chiefs vs Redskins (both games in which our model best bet the under).

By contrast, the soonest you can count your un-hatched chickens in a spread bet is at the end of regulation when you’ve taken a huge underdog (we notched the Bills vs Jets as a victory at the begging of overtime because we had 9.5 points).

On a more philosophical note, the OU is also more a reflection of the character of the game. We were glad our model took the over in the NO vs NYG game because we thought the game pitted great offenses against decent defenses and that it would be a shootout. As far as who would win, who knew? The model has NO by 2.7 points but with zero confidence.

On a more practical note, adding the Over Under to our offerings has increased our bet-worthy events from 3-5 per week to 6 – 10 per week. The increase in bet-worthy events narrows the probability distribution of our expectation values, increasing our odds of a winning week. Note that even though our individual weeks range from 63% - 70% odds of winning, YTD we have a 76.5% chance of winning (and each event is only 55% - 60%). The more events we can add, the faster we narrow the distribution around our 110% expectation value – making winning a more certain long-term outcome.

Week Five Another Profitable Week - Free NFL Picks from bestofblog.net

NFL Week Five bet units are in the bag; we finished 7/11 on our bet units for the week. It looked like Houston would pull it off and make us 10/11 (we had three units on them), but still a respectable week for us. It brings us to a 109.5% ROI for the 2009 NFL Season so far and completes our fourth winning week out of five.

We want to give props to the first other statistically based pick system we've seen on the net, advancednflstats.com. I guess they're technically a competitor, but its just refreshing to find someone other than us posting useful statistically based probabilistic data on NFL outcomes.

We are able to and would like to convert their probabilities to ATS predictions; we're awaiting their permission to do so (or they may just choose to do it themselves). Anyhow, we'll post week six picks on Wednesday or Thursday.

- Happy

Is parlay betting wise?

Parlay betting can be exciting, but is it a smart bet? The simple answer is that it’s irrelevant. Parlay betting essentially multiplies your action. This means that if you’re a winning player, you’ll win more and if you’re a losing player, you’ll lose more. It does increase the standard of deviation which makes it a riskier bet but potentially more lucrative. Over the long haul it won’t make a winner lose and it won’t make a losing player win.

The simplest way to envision how parlay betting multiplies your action is to imagine a two event parlay where you lay ten dollars down. The casino sees this as one certain bet and one conditional bet. If the first event goes in your favor, you lay $19 down on the second event. If the 1st event doesn’t go in your favor, you do not bet on the 2nd event.

Again simplifying, suppose you win the 1st event 50% of the time. On average you will lay $9.50 down on the 2nd event. This means that your $10 bet got $19.50 worth of action. A three team parlay would get $28.53 in action, four teams would get $37.10, etc.

If you are winning 50% of your bets, this increase in action increases your losses. A 10% juice casino could expect to earn $0.50 off a single $10 wager with you. A four team parlay would give them $1.85.

On the other hand, if you are a winning player, increasing your action can increase your win rate (but also increases the variability). If you are winning 57% of your wagers, a $10 straight bet has a positive expectation of $0.83. A $10 four-team parlay would give you an expectation of $3.76.

It might seem then that you’d always take really deep parlay bets if you’re a winning player. The problem with that is that the standard of deviation will often see you broke before you hit. Bankroll management and appetite for risk are key considerations when considering parlay betting.

That notwithstanding, it can be a nice way to increase action without laying out too much cash up front. Were I able to bet I’d probably take a lot of two & three team parlays.

http://www.bestofblog.net/nfl_picks_2009/2009_YTD_nfl_analysis.html