TheWolfLine Blog

  How to Navigate the Structure of a Probability Priced Sports Betting Exchange Platform by Using Options Theory/Application and Greek Risk Variables A probability based sports betting exchange is predicated on the buying and selling of probabilities (just like it sounds) of pre-game/contracts and in-game/contracts. A "sports bet" is the same as an options contract and is composed of underlying price (the score of the game), the strike price of the option (the point spread or total of the game depending on the bet), the time remaining in the contract (time left in the game, half, etc.) and implied volatility (the total expected scoring remaining in the contract). From this point forward, the contracts will be referred to as "the game" (obviously there are also bets to be made on halves of games, quarters of games, etc. just as there are weekly, monthly, quarterly and LEAPs options and the same adjustments would be applied). It is very important to ...

Below is the answer, and why You are right. We will make the assumption You have some basic understanding, if even only from a movie or quick news story of Stock Options. We will clarify as best we can about all the similarities. In sports, the strike price is the pointspread, the stock price is the score of the game, the time left to expiration is the time duration of the bet and the implied volatility is the total. Since there is no score before the game starts, a pre-game bet will always be an "At the Money Option". This can change throughout the game as the score changes, the time left in the contract/game changes and the implied volatility/expected amount of scoring/total changes. As with stock options, if you "buy points", that is the same as buying an "In the Money" option which will cost more because the bet now has intrinsic value. Vice versa for selling points. An options contract is made up of stock price, strike price, t...

Why Did It Cost So Much To Buy The +1.5 Runs (Runline) With The Atlanta Braves At The Philadelphia Phillies On 6/10/21 (Warning: TWL Options Theory Ahead) When we are discussing buying runs/points/pucks/goals, etc., we are discussing increasing the probability of a "winning bet" that is paid for by a decreased potential Return On Investment (a "debit position"). When we are discussing selling runs/points/pucks/goals, etc., it is the opposite because we are then decreasing the probability of a "winning bet" and are rewarded for that by an increased potential Return On Investment ("a credit position"). The example here of the underdog Atlanta Braves visiting the favored Philadelphia Phillies (on the moneyline) will be addressed in terms of "mid-market"/"fair-value" probability percentages (which some readers with experience in Options Greek Risk Variables will recognize as the King Greek called ...

  Q:   If Mr WolfLine says that the sports betting equivalent of BUYING (getting long) an At the Money naked call in options trading is betting  Team A Against the Spread and betting "the over" in the totals market,  then what would it translate to in options trading if I still wanted  to bet Team A against the spread BUT wanted to bet "the under" in the totals market A:  To establish this  position, the trader could either SELL (get short) a Team A At the Money naked put or SELL (get short) a Team B At the Money naked call. IMPORTANT:    This is theory.  In the real world, most retail customers  are not  permitted to sell naked options (options not covered by either  another  option or the underlying stock...which we will get to later)  because of  the risk potential/margin requirements.  The most that can  be lost when  buying naked options is only what is paid for them and the...