Annual March Madness Bracket Hedging strategy reset

You picked Butler or VCU in your bracket? Cmon General Nikki Benz, salute the reader!

There are two absolutely no lose situations for those who put ten bucks in to their 2011 March Madness NCAA Basketball Bracket:

• You separated yourself from the masses you picked Butler or VCU  to win the whole thing
• Like me, you took a high risk bet of 100:1 for Virginia Commonwealth to win once the Sweet Sixteen was set.

No lose situations do not pop up very often – and while you could certainly choose to risk no additional bankroll for the superhero like winnings, why not get a few bills out of your pocket to ensure 100% chance lesser winnings?

Learn how after the jump (here is a link to the 2009 version)

Let’s look at option one above in detail as it applied to more of you out there – you are one of four people to pick Butler in your pool and your pool pays Top 3. You can easily tell if you are in the running from here, and let us assume that worst is third place $200. So despite all the games played, right now you have risked $10 (pool entry fee) and your minimum expected win is $200…BUT ONLY IF BUTLER WINS THE TOURNEY!

Hedge your bet and lock in profit – put $20 on VCU +125 Money line to win the Final Four matchup! If your bracket gets busted and VCU wins, you lose your old ten but your extra $20 just was returned with $25 winnings.

Debit $30, Credit $45 = $15 profit (150%)

You just bought yourself a better chance of profit , even if it is a lesser one (150% vs 2000%).

Now if Butler wins the semi and faces the winner of Kentucky-Connecticut, you can put $10 more on Butler’s opponent in the title game. Assuming 1:1 odds if Butler loses:

Debit $40, Credit $40 = $0 profit

Not great, but at least you don’t lose ten. While mathematically the right thing to do, I can understand if you would rather not put down ten more since the upside is so great. This is about hedging.

Best case if Butler  wins the title – yes you lost your new $30 in hedging, but:

Debit $40, Credit $200 = $160 profit

So in the end, downside is nada and profit just a bit less than your original high risk scenario. THAT is called positioning.

 

Do not be a cheapskate – your high risk bet allows you to use strategies like this to guarantee a profit. Do not let your profit evaporate.