[Ganchrow]

Which of these two bet would you consider "riskier"?

For the sake of discussion you can assume the player has a $10,000 bankroll.

[juuso]

$100 wager with a 5% edge at odds of +1,000 is "riskier" IMO.

-1000 bet has a lot lower variance and hits at much higher clip. 5% edge at -1000 also better than 5% edge at +1000

[HedgeHog]

I'd say the "risk" level was equal. The "comfort" level ,however, may be different as one grand may be a lot of money to some--perhaps more than they can stand to lose (even if the chance of loss is under 10%).

[Ganchrow]

Originally Posted by HedgeHog

The "comfort" level ,however, may be different as one grand may be a lot of money to some--perhaps more than they can stand to lose (even if the chance of loss is under 10%).

The issue of a "comfort level" is of course separate (although related to) risk.

For the purposes of determining a "comfort level" you can assume a $10,000 bankroll.

[HedgeHog]

Originally Posted by Ganchrow

The issue of a "comfort level" is of course separate (although related to) risk.

For the purposes of determining a "comfort level" you can assume a $10,000 bankroll.

Ok, I was assuming this was a one bet deal. If this is a series of bets then the -1000 bets are less risky--as defined by higher likelihood to show a profit over dozens (or more) of bets.

PS And even if it were just a 1 bet thing, the -1000 bettor has a greater than 90% of profitability compared to less than 10% chance for the big dog bettor.

[ShamsWoof10]

I would "assume" the -1000 is a greater risk... Just because someone is favored does not mean they will be the better team on that day....

The problem I have with sports probabilities is they are not accurate... There are too many variables that can not possibily be known before gametime... The data output is only as good as the data imput... Having "coached" and "played" as well as being a bettor I always use to wonder... "if we were a college or pro team there is NO WAY ...AAAAAAANY handicapper could factor in what goes on here behind closed doors that makes all the differance in the world during the game...

In cards it's differant.. If a certain number of cards are gone then what's left is a certainty... In sports you can have a bet that Steve Nash will make his next FT and even if he knows and will do it to help you out he still can miss... He's a 90some percent FT shooter so even if he knows and wants to make it to help you out his percentage can't go much higher to 100%... It actually might go down if he gets to nervous...

Probabilities are cute but that's about it...

[CrazyL]

Option B seems too standard/obvious...

And because it is a Ganchrow question I know it has to be what makes less sense on the surface, and in some advanced mathematical way is actually theoretically correct. So my vote is option A.

[LT Profits]

Assuming you are a good enough handicapper that both 5% edges are accurate, I would say both risks are equal. You expect to gain 5% in either case in the long run.

[Ganchrow]

Originally Posted by LT Profits

I would say both risks are equal. You expect to gain 5% in either case in the long run.

Might it be relevant that you're risking ten times more on the -1,000 bet than on the +1,000 bet ($1,000 versus $100 respectively) ?

[20Four7]

It comes down to your definition of risk.

Risk amounts to the chances of a negative impact to an asset (bankroll). Therefore having 10% of your bankroll riding on a bet would appear to be riskier than having 1% of your bankroll riding on a bet.

If your looking at volitility of returns etc, than the dog would show more volitility in my opinion.
As a smaller percentage of your funds are at risk you should be able to sustain the volitility and therefore would be less "risky"

Now if ganch wants some mathematical "proof" this is the case I'll pass.

[HedgeHog]

Originally Posted by LT Profits

Assuming you are a good enough handicapper that both 5% edges are accurate, I would say both risks are equal. You expect to gain 5% in either case in the long run.

I agree that "profit expectation" is equal for the long run. But I would think that risk would be higher during the interim with a +1000 bettor due to the inevitable long losing streaks-- where 20-30 failures in a row would not be unusual.

PS 20Four7 beat me to the punch!

[HedgeHog]

Originally Posted by Ganchrow

Might it be relevant that you're risking ten times more on the -1,000 bet than on the +1,000 bet ($1,000 versus $100 respectively) ?

Might it also be relevant that the +1000 bettor is ten times more likely to lose each time? You're toying with us Ganch.

[Ganchrow]

Originally Posted by 20Four7

Risk amounts to the chances of a negative impact to an asset (bankroll). Therefore having 10% of your bankroll riding on a bet would appear to be riskier than having 1% of your bankroll riding on a bet.

If you were to measure your risk in such a manner ("the chances of a negative impact to an asset (bankroll)") then wouldn't the -1,000 bet be less risky in that you'd only lose that bet approximately 4.545% of the time versus 90.455% of the time with the +1,000 bet?