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4. Your estimation of the odds have changed, in the time elapsed between the original wager and the hedging opportunity; or your assessment of which side of the bookmakers' odds you prefer to be on has changed.

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I think this is in Rule #1 that I wrote. If you think the true odds have changed, you shouldn't be betting the hedge unless it has zero or positive EV.
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For example, if I thought USC winning the Rose Bowl was +EV at +175 pre-season when I took the wager, but no longer think they are a good bet at -170, I would seek to hedge it, and lock in the winnings I've gained from the odds differential.

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Let's assume you bet it at +175, and think it is now worth -160. You wouldn't want to bet it again if you saw USC -170, but at the same time, you should not be looking to bet the hedge unless you could get fair value: +160.
This is not a case where the risk is all that great. It's close to an even money bet. If the risk is really too much for you to stomache right now, then you overbet your bankroll in the beginning of the year.

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Thanks. I thought my #4 was a little different than your #1, but I guess you're right.

The risk is not too much for me to stomach, I'm just thinking about my #5, reducing variance. I did overbet my bankroll somewhat, seeing that I bet about 5% of my roll on each item.

SC winning the championship or not is not actually the bet I'm concerned about the most, it's just the one that garners the most discussion, because other posters are actually interested by whether that will happen or not. But you're right, it's not like a ton of money riding on that.

What I'm looking at is the Reggie Bush bet I laid down at +460 to win the Heisman. Current odds are around -200 on him to win. So my current expectation is 67% to win times 460, plus 33% to lose times -100 equals +275 per unit.

If I hedge this bet, I can guarantee myself +266 risk-free no matter what happens. So I can lock in win to boost my bankroll by 13.3%, or I can take this risk of losing 5% of my roll for the potential reward of winning 23%. That's a -18.3% loss if Bush loses the Heisman, vs only a 9.7% gain if he does win.

Yes, there's a tiny, tiny amount of -EV in the hedge, but how do I calculate for the variance I am reducing? We know that consistently betting 5% of your roll will get you quickly broke, even if you are laying +EV wagers. So I only bet that much more than normal where I am quite confident (and yes, this is undisciplined). I would not be heartbroke to lose, and it wouldn't drastically hurt my roll, it's still just 5% at the end of the day.

Okay, I know the standard math answer is to let it ride, rather than taking a tiny -EV hedge. But shouldn't booking a 13%+ win and eliminating variance count for something? i.e. How does the risk of ruin factor into the math?