Unless your last name is Neuheisel it is quite likely you put a Hamilton or a Jackson into the office pool, so this post revisits how to lock in big winnings in your Final Four bracket pools.
Your pick for March Madness should allow you to make it rain in April, especially if you are a Tarheel supporter.
If you were wise enough to pick one of the finals participants in either the Michigan State Spartans or the North Carolina Tarheels, there is no reason why you should let your big payday escape you, especially now when times are tight.
All you have to do is hedge your bracket pick by betting the other side with your Sportsbook. Let me explain – in 2008 my good friend Stewie had Memphis to win it all for his $10 entry fee, and he was easily the points leader so he was due for a $300 payday if the Tigers won. That is a huge payday but the risk of walking away with nothing was out there.
I instructed him to put $140 on Kansas straight up to lock in his winnings because now he was bringing home $300 risk-free regardless of the result.
After the jump, how to do this for 2009…
This is very similar to what large institutional stock and bond investors do in a market-neutral trade – risk is abated since the direction bet is erased.
Whether by luck or by skill most office pools are paying off huge percentage gains to their winners so it would be wise to take advantage of your fortune. Using Stewie’s example he had a 30:1 payoff if he wins but nothing if Memphis lost – by hedging your bet with Kansas on the moneyline you guarantee a 2:1 payoff WITH NO DOWNSIDE RISK.
So here is how you do the 2009 version assuming your $10 entry will pay $250:
If you have UNC to win it all you have a unique chance to use immense leverage since Michigan State is such an underdog at +300. All you have to do is invest $83 in Michigan State to make your $250 out. So $93 out, $250 in regardless of result. THIS IS THE HIGHLY RECOMMENDED PLAY FOR ALL OF YOU WHO PICKED THE TARHEELS.
If you have Michigan State to win it all then you have a more difficult mathematical and financial situation – you will have to layout tons of cash with UNC being a -360 favorite. That equals $900 on UNC to win $250 and this is not a great outcome if Michigan State wins since you will only win the $250 and you just put 3.6x that on UNC. The only pragmatic solution is to put $36 on UNC to win your original ten bucks back but even this would leave a bad taste in the mouth of any gambler.
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