Should I sell shares of myself?

HammerinHank · #1 10-21-2005, 01:14 AM

Alot of tournament players sell percentages of their tournament action. What is the advantage in doing this? I make $1.75 on each dollar of buy-in so why sell 10% of my action for 10% of the buy-in? Do players sell their action at a premium? I don’t get it. I’m playing in 3 mid level buy in tourneys this weekend and have offers to buy my action. What am I missing? [img]/images/graemlins/confused.gif[/img]

Exitonly · #2 10-21-2005, 01:17 AM

it lowers your variancee.. and typically you can sell 10% of yoru action for 20% of the buyin..

#3 10-21-2005, 01:23 AM

Um, if you know your ROI is .75, sell your action at 1.86 times your buyin. E.g., your average return for a 200+15 tourney is $376.25, sell your action for $400, netting you and EV of $23.75 in excess of your normal edge and diminishing your variance to 0. Do you think anyone would sell their winnings for less than or the same as their average return? Basically it's the same idea behind buying a lotto ticket with x chance to win y dollars where xy is always far less than the price of the ticket.