Point shaving is when the bookie "pays" off an athlete to lose a game. For example, I pay off the kicker to miss a field goal if the game is close and let's say the line is - 2 1/2. So if the game is tied, if the guy makes the kick, his team will cover. I'm betting against him so I bribe the kicker to miss the kick. That's point shaving. Here is the official definition. http://en.wikipedia.org/wiki/Point_shaving "In organized sports, point shaving is a type of match fixing where the perpetrators try to prevent a team from covering a published point spread. Unlike other forms of match fixing, sports betting invariably motivates point shaving. A point shaving scheme generally involves a sports gambler and one or more players of the sports team favored to win the game. In exchange for a bribe, the player or players agree to ensure that their team will not "cover the point spread". The gambler then wagers against that team."
I will give you a simple example and, if you are the man I think you are, you will not let that half-a-mill handle over four years go to your head and you will simply give up on the conversation. Since you seem more conversant with football i will use that. If I am making book and you call in a dime bet on da Bears if you win I give you $1000 and if you lose you pay me $1100. That is true whether I get any bets on the Giants or not. If another punter calls 10 minutes later and bets $800 on the Giants if he wins I pay him $800 and if he loses he pays me $880. Did I just do a principal transaction with you or did I act as your broker and charge you a commission. You laid me 11 to 10 -- done. The other guy laid me 11 to 10 on his action -- done. There is no agent relationship between us. When you get off that phone you have a bet with me irrespective of every other bet I handle that day -- OR DO NOT HANDLE. And I did not tell you on the phone that I needed to match you action with anybody. It is as much of a principal transaction as if I called Goldman (in the day of the telephone call) for a bid on 100 mill of the 10 year and they quoted me par for the lot and I said done. By my senior year in high school I was betting a dime pitcher's line and my typical week's action was $20,000 and there were spikes up to $35,000. Just in case you are not conversant with the pitcher's line in exchange for both the right to specify starters on both sides and the spread being cut by half (a 7/8 is a 20 cent line and 150/160 line cuts the spread in half and is called "the dime line") I had to guarantee them $1,500 in action every time I called for a line. It was offered to maybe one player in 200 in NYC in the day and except for Vegas, Chicago and Boston barely existed elsewhere. In the late 70's when I had business in London and my partner needed to spend six months in NY I took the London office for six months. The office I bet with, rather than lose my action, offered to settle up the baseball season after the World Series (this was April). I declined. I had no interest in having a potential six figure balance outstanding ... either way. Mav, the type of action you are speaking of is what I gave out at by the time I was 16. I owned pieces of two mid-sized offices that I financed and had no management responsibility for at one time. Like I said, you are simply out of your league. Think of it this way: My fastball was 97 MPH and yours was 87. It doesn't sound like much -- only 10 MPH -- but I get a seven figure signing bonus and you get to bang the barmaid (the one without the mole) that works weekends in Fast Eddy's Bar and Grill. For Christ's sake Mav, JUST GIVE IT UP!
You are starting to sound like a dick. I'm done here. Enjoy your night. Good luck with everything. BTW, google how a bookie gets paid and down yourself a G & T. Enjoy.
Google how to trade. Good luck with getting real life information that way ... lol. Yeah ... I guess I was a dick. But you were trying to tell me what I know cold. And you were dead wrong. Johnny Black for me ..... not a G & T.
This is a fallacious argument and proves nothing on the face of the fact that there are managers that have outperformed the market for many years. Some monkeys can turn lucky and be profitable but not all profitable managers are just lucky. Do you understand the difference? It is very basic but also very important for your own future to understand why your argument is fallacious in a formal sense. This blog has a good piece on this issue http://bit.ly/fN9R94
That may be the case, I am no expert here. But I think it remains true that it is exceedingly difficult to prove statistical significance of a positive expectation. I am not arguing there are no traders who consistently show a positive expectation over a very long course of time. But I don't know of anyone who has satisfactorily proven that consistent traders have a statistically significant edge, e.g., a p-value less than 0.05 with all the corrections and considerations that come with correlated events. We all know the stock market tends to be bursty: long trains of similar patterns seem to cluster together temporally rather than uniformly because of autocorrelations. The time distribution (density) of those clusters are likely fractal in nature, i.e., they are multi-timescale, there are clusters on the minute, hours, days, weeks, months, years, decades timescales. Therefore it may not be implausible to think that a 20 year streak is due to shear chance (just generate 10000 random walks: I am sure you can find some trajectories that are eerily similar to a PL curve with consistent positive expectations, of course with draw downs and all). That doesn't mean to say that I am asserting it is definitely not due to skill, just saying that it is difficult to prove otherwise. In fact, I believe if statistical significance cannot be shown in any experiment, then the argument is neither proved nor disproved; the answer simply remains unknown.
I did some research along these lines a while back. I had the same idea: if I found a strategy around 1/3 win rate, then reversing the trades should change it to around 2/3 win rate. So I coded an app to do it. The win rate still came out around 1/3. Looking into it more deeply, the original 1/3 winners became losers, then of the original 2/3 losers, half (or 1/3 of total) became winners, and half (or 1/3 of total) stayed as losers. Results: 1/3 of trades didn't matter if they were long or short, they were going to lose either way. Conclusion (just my opinion): my strategy was not a real strategy but just a random entry-exit process.
Mav & Swan. About the bookies. I worked for several mayor books for about 8 years total... There's 2 parts to every line, there's the spread and there's the money line. The spread is # of points you have to cover in order for your favorite to win, or # of points that your underdog can give while still winning. The money line is a line made purely of money... where you have to lay more on the fav than on the dog... the default line is -110 on each side (also known as a pick), sometimes you'll see a -120 line where the dog doesn't lay any vig. usually these lines have a 20 cent difference, but it can widen on higher prices... Money lines are usually used for Baseball, boxing, car races, golf, etc... while spreads are more common in footbal, basketball... You can also find combinations of both, where you have to cover a spread + you get different money odds on each side... For example if a bookie has a footbal game at -2 and a half, he may prefer to go to -2 and half laying 20 cents (where the dog gets 2 1/2 points and no vig) On spread lines most bookies allow you to turn your spread into a combination by "buying points" on the spread. e.g. it cost you 10% extra to move the spread from -5 to -4 1/2 hockey is a combination by default... (a money line with a spread) regarding how they hedge... the bookies look at Don Best which is similar to a quote board for each game... in order to keep their lines in line with everyone else. A good bookie is the one that's able to atract an equal amount of money to both sides of the game without moving his spread too much and without giving away too much of the juice (vig). a bad bookie finds himself holding bets on different spreads on both sides of the game, with a situation where too many of the bets on both sides are winners if the game falls on a magic number... e.g. a lot of action on the favorite at -2 and a lot on the dog at +4, if the game falls on 3 bookie losses... there's a lot of speculation about where the line is going to move, with wise guys trying to middle the bookie by taking positions on the football lines early in the week hoping that the line will move. And yeah they sometimes lay off on other books to "hedge" some of their bets away...
Strategy/methods with high % of lossers. One such strategy is the one proposed by taleb for hunting Black Swans, where you systematically buy deep out of money options and hold them to expiration. This strategy could produce "small" losses for years, and still turn to a massive profit by a single winner when something completely unexpected highly improvable and extraordinary affects markets making your deep out of the money options go deep in the money. sort of a reverse LTCM approach...
Eusdaiki, right. Guys rarely play the moneyline in football as that is just a straight up win or lose, no spread. Most people either take the spread or lay it. The money the bookie makes is on the juice, which can be paid either by the loser or the winner, depending on the bookie. My issue was with him saying bookies don't make money on the juice, or the vig rather they make money on the spread. The lines are very tight and I can call around if a bookie is making a line too high, he won't get my business. Say the Bears are favored -3 1/2 over the Packers. Some bookie can't be a wise ass and offer me Chicago -5 1/2. The going spread in the market will be -3 to -3 1/2. And yes, you can buy or lay that extra half point if you want. And like you said, if one wanted to play the moneyline, that is usually fixed at 110/100. You don't move that line to 140/100. LOL. Again, if you did, I wouldn't bet. Bookies make their money on the "juice" or the "vig" or whatever you want to call it, but it's usually fixed at 5% or 10% of the betting amount and is paid either by the winner or the loser, not both.