The Hidden Cost of “Set-and-Forget” Live Hedges

Do you ever leave bets in the market that trigger automatically if the odds reach a certain level?

For example, when you’ve bet pre-match on a player and want to hedge when he’s close to winning the match?

I do it quite often, mainly to hedge my pre-match bets on certain players.

But this approach has a drawback. Let me explain it with what happened yesterday in the Fritz–Alcaraz match in the ATP Finals on Tuesday.

I had backed Fritz prematch at almost 5.0 and wanted to cover my position live if he won the first set and went a break up in the third. I’d have done the same if it was 1-1 and he went a break up in the decider—though obviously at a lower price.

Normally, if I can’t watch the match for any reason, I leave the order placed in the market. But that’s not optimal, and here’s why.

Imagine yesterday I had left a live back hedge bet on Alcaraz at odds 5.0. That means if Alcaraz’s price touched that level, the bet would have been matched.

Well, Fritz won the first set, and in the second set at 2-2 with Alcaraz serving, Fritz had two break points.

On each of those break points, I saw Alcaraz’s odds go close to 4.0.

If I had left that order at 5.0 and Fritz had broken serve, with set and break up, the American’s momentum and the quick conditions would have sent Alcaraz’s odds well above 8.0—maybe even 9.0.

And what would have happened with my bet? It would have been matched at 5.0, the limit I set. Meaning someone following the match live would have taken advantage and grabbed that “inefficient” price.

However, if I’m watching the match, it makes no sense to leave the order in the market.

Because I know that with just one point, odds can move violently, in big jumps. So I’d just be throwing money away.