Earlier this week we retweeted some of our comments over the summer regarding the Nebraska Cornhuskers. Both off-shore and Las Vegas books released their "Games of the Year" lines at various times. These games being the Top 50 or 100 games that would draw the public's interest. Wisconsin opened up as a 1.5 point favorite against Nebraska and we were able to scoop it up around -2. The line eventually got to -3 before the season started and the game was taken down. This week the game opened at 9.5, was but up to 10.5 and then bet back down tonight. We're faced with a situation that present's a great middling opportunity.
We did an in-depth analysis of middles regarding season win totals in our blog, "Outs - and We're Not Talking Baseball" and how you can get them by having different places to bet. Our point in that blog was in quantifying what percentage's a middle would have to hit. When playing a middle with -110 odds on both sides the odds are always the same, and you need to hit the middle at better than 5.00% to justify taking that position. That is only one part of three step process.
In Step 2 we must quantify our current position's "market value." In this instance we have already made the bet (not like when we were looking at two different win total lines and not having bet either yet), so that changes some things. First, the "market value" of our current position. Clearly, we have an advantage of having Wisconsin as a two point favorite rather than a nine point favorite. What value is that, though? If we were to estimate that each 1/2 point costs you 10 cents (-010) or a full point 20 cents (-020), you could argue that our current bet is worth +140 (7 points x 020 = 140). Theoretically, someone would be willing to pay us +140 for our ticket. If you incorporate that into what we've already risked (-110) + the current market value (-140) we're now basically risking -250 to win +100 that Wisconsin covers by -2. This is very similar concept to the financial and accounting policy of "mark to market." It takes an asset (in a financial case a business you own), values it and makes you carry it on your books at that value, even though you haven't sold the business yet. Just like in this case we own an asset (WI -2), value it (-250 to win 100), and carry it on our books (understand what it is moving forward).
With all of that understood the question becomes when to hedge and go for a middle and why? There's basically three reasons: 1) You feel the second bet (Nebraska +9) has value independent of you first bet, 2) You feel the middle will hit more than 5% of the time and that value outweighs the current market value of risking -250 to win +100 or 3) Risking -250 to win +100 is too high for your risk tolerance, and want to get off the position for a less risky position like a middle that risks -010 to win +200.
One other way to attack a middle is to middle part of your original bet. It combines a bit of options 2 and 3. Using our Wisconsin -2 example, let's say we bet $110 to win $100. We may want to hedge part of it. We would bet Nebraska +9 at $55 to win $50. If the middle we're to hit we would win $150, if Wisconsin were to win by more than 9, we win win our original $100 minus our $55 on the Nebraska hedge for $45, however if Nebraska were to win or lose by two or less we would win our Nebraska hedge and $50, but lose our $110 on the original Wisconsin and losing $60. We basically would be risking $60 to win $150 or $45. If you assume a winning bet has a 50% chance of either being the middle or Wisconsin by 9 or more, we're risking $60 to win $97.50 ($150+$45 divided by 2) or +163 that Wisconsin wins by -2.
If you follow us on Twitter you'll notice we like to hedge with a second half bet that also provides value, bascially incorporating options 1 and 2 described above. If we hedge other wise, we try and do it in the fashion in the previous paragraph. If line gets driven to 10.5 we'll likely enact that scenario.
On to our model play's we explained last week
Spreads:
Arizona +12.5
Florida Atlantic +10
Kent St.-16
Mississippi St. +7
North Texas +23
Notre Dame -12
Penn St. -14.5
Toledo +8
Akron +8.5
Georgia Tech -9.5
Northwestern +10
Totals:
West Virginia / Bowling Green under 61
Georgia Tech / North Carolina St. under 63.5
Idaho / Virginia under 54
Nebraska / Wisconsin under 57
Auburn / South Carolina under 60
Washington St. / Colorado over 58.6
The following are our plays with a brief explanation:
Utah St. +7.5 @ BYU - BYU has been less than impressive the last few weeks on offense. Their final result last week looked good, but they got lucky with turnovers. Utah St. has played both Auburn and Colorado St. tough and think they should give BYU a great effort as they are a "Big Brother" in their region.
Alabama -3.5 @ Florida - The Swamp will be nothing new for the Crimson Tide. We think Florida maybe a bit overrated having only played one decent team (at best) in Tennessee. We think they're a bit overvalued when playing this Alabama team who's defense has been and most likely will continue to be dominating against a Florida offense that can struggle at times.
Michigan St. +3 @ Ohio St. - As we chronicled earlier in the week Colorado never forced Ohio St to drive more than 50 yards for a score. Despite throwing for three touchdowns Braxton MIller was only 5 for 13.
Virginia Tech -6.5 vs Clemson Clemson off of two big wins, now have to play at Blacksburg as Tech opens conference play. Good luck, something tells me the Hokies have been biding their time ready to unleash for this game.
As always don't forget to follow us on Twitter:@TheSportsMarket for new game adds as the lines move, and halftimes.