Ever think Sports Betting and "Wall Street" were the same?

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, time left to expiration, and market implied volatility. The intrinsic value is if the current price of the stock exceeds the strike price to the upside for a call or exceeds the strike price to the downside for a put. The extrinsic value is made up of the time to expiration and the market implied volatility. That is why a $50 call with the stock at exactly $50 and a week to go until expiration costs $. That is the At the Money Strike Price. If a $50 call is offered at $2, you are making a bet that the stock will expire above $52 by the time of expiration. That bet costs $2 because of the extrinsic value which gets higher as implied volatility gets higher and/or there is more time left to expiration. Obviously because there is more expected potential for a larger move, and vice versa.

As this relates to TheWolfLine and SportsCardCounting we need to make it primary, and profoundly clear, that TWL has zero to do with the current market spread, totals or moneyline. For the moment, for simplicity purposes, we will stick with spread. TWL spread charts are no different from a stock chart or any other market asset chart. Yes, it is as simple as "win against the spread is an uptick. a Loss against the spread is a downtick on the Y-axis( the Green or Red lines) and the X-axis is the chosen period of time(the horizontal)". But how does that happen and where is the correlation to stocks? (from here out, I will only say "stocks" for simplicity). What makes a stock chart? This, When a market is made, say it's $100 stock and the market is $99 X $101 with 100 shares being offered. If the buyers buy all 100 shares ("take the offer) at $101, then the sellers will move the offer to $102 and offer another 100 shares there (covering the spread). If the buyers then buy all 100 shares at $102, then the sellers will move the offer/ask to $103 and offer 100 shares there, and so on. Eventually this forms a "bubble". On the other side, if the sellers sell all 100 shares at $99, then the buyers will drop their bid to $98 (not covering the spread) for another 100 shares. If that bid is hit at $98, then the bid will be "faded" again down to $97, etc. Eventually this forms an irrationally distressed asset. That is exactly what TWL charts are showing for sports, remember wins against the spread are upticks and losses are downticks. The current TWL "spot price" is the same as the current stock spot price, the previous "spot" prices are the up or down ticks and whether that team covered the spread or not. We take it a step further and show the charts comparatively with each team currently playing since these are relationship markets. TWL indicator is a "divergence measurement" between the two teams in the chosen time period that shows "maturity level" of that relationship and potential for an irrational scenario, a higher "Card Count" if you will. That divergence, the difference from each Team's TWL Spot Price are what those color coded indicators are showing. This is paramount for people to understand, It has nothing to do with the current market pointspread. Please take a look at some videos on Youtube to see TWL Technical Analysis and Options in action. https://www.youtube.com/channel/UCoYcW2pBryrHwVeCMOd-00w

Here are few more examples of Options Strategy relating to Sports Betting.

A "covered call" also known as a "buy-write" because you are buying stock and "writing" (selling) and "Out of the Money" call (upside) against it, is the most popular options strategy that there is. In very simple terms. if the stock is 50 and you buy the stock and then sell the 55 calls for $2 and the stock expires at 54, then you "win both bets". You win $4 on the long stock and $2 on the short OTM call which expires worthless. This is how TWL does it. It is also a "short volatility position" because you are net short an option (you don't want too much movement in the stock/scoring). The strike price of the short call can be changed in alternate moneyline same as it stocks. In stocks, you will receive more premium if the strike price is closer to the current stock price. This can be done in TWL-options by laying points with the favorite moneyline bet, and vice versa. So if you bet a dog +7 and the favorite -280 straight moneyline, you can increase your ROI if your moneyline bet on the favorite is -4 (you will not have to risk as much) because you will only have to lay -170 or whatever and vice versa. This will be affected by the IV (total) because the higher the IV, the less points matter so those tight margins have a much less chance of happening. That's why (let's use basketball so we don't have to be concerned with the "key numbers" in football) it costs much more to buy/sell points if it is CBB with a total of 120 than an NBA game with a total of 240.

1) Bet the underdog ATS (buy the stock) 2) Sell the underdog Out of the Money(OTM) call against it. This is done by betting/buying the favorite moneyline because that is the same as betting against/selling the underdog moneyline which is short the underdog out of the money call. 3) Bet the under (short volatility)

This can also be done as a "vertical options spread" with the ATM(At The Money) acting as the stock but that is for later, Point is this strategy, and also a protective put which is similarly well known and simple for me to construct with TWLoptions, is important because of how widely it is known and used. If someone is in the financial services industry and doesn't know what a covered call/buy-write (or a protective put) is, then I do not have an answer for that except do not let them manage the money of anyone that you know and like You win all (just like in the covered call) if the underdog covers, the favorite wins moneyline, and the under wins. If you wanted to do it with the favorite being the stock then you would have to add points to how much the dog is getting and sell the favorite at that strike price because that would be "Out of the Money" for the favorite. So bet favorite -7 (long favorite stock) and bet dog (sell favorite) +14 (OTM call for favorite). If it falls between 7 and 14, you win both because the favorite -14 (OTM call) which was executed by buying dog +14 (dog ITM call) expires worthless, and the favorite long stock -7 also wins, but you will have to lay juice with the long dog +14/short favorite -14 just like with the long favorite/short dog moneyline in the first example. The issue is the probability of outcome and moving closer/further away from the ATM strike price which is "the pointspread". Because this is a "net short position" in the options. In theory, this would also involve betting the under since it is a "short volatility" position (for practical purposes, the less realized scoring that there is relative to market expected/implied scoring gives this position a better chance at landing between favorite -7 and dog +14 (win both)

Yet another example of Options Strategy in Sports Betting Another example is the "delta neutral straddle" (it's almost always referred to when going into earnings by the financial media). If the stock is trading at $100 and the cost of the near term ATM calls + the ATM puts is $10, then they will say "the market is pricing in a 10% move in the stock (volatility = how much stock moves/points, etc are scored...TWL does historical realized volatility vs historical implied volatility. If stock moves 15 bucks/realized and the market priced 10 bucks/implied, then that was an "over" and vice versa). So if you buy that straddle, then stock has to move 10 bucks either way after the earnings report for that "over bet" to "win", and vice versa. The direction is irrelevant. Same as a total bet with no spread or ML bet. I am just throwing stuff out to see how it sticks with what you think the audience can handle. So the same can be said about the market pricing in a total of 45 going into the game. Almost always, there is still time left to expiration after the earnings call (although the current media doesn't explain that so probably best commercially to just go with that), so you can still trade that position going into expiration ("Live"/"In-game").