Monday, 7 March 2016
Bookmakers, with a few honourable exceptions, reside deep in the gutter.
If a bookmaker suggests that you do A then, as a general rule, B is the preferable option.
And so it is with 'Cash Out' and Leicester City winning the Premier League title.
One John Pryke had the foresight to place a £20 bet at 5,000/1 outright on the Foxes winning the Premier League this season.
Being a Leicester fan, he had an emotional attachment to this bet being landed.
This emotional state may well have cost him £71,000 as he was persuaded by Ladbrokes to 'cash out' for £29K.
His timing was perverse.
He closed out prior to the North London derby and Leicester playing at Watford with Jonathan Moss refereeing the latter game.
If he had waited until after these matches, he would have been able to 'cash out' for around £10K more.
And if he had listened to his son, he would have won £100K (assuming that this year's title race is a conspiratorial fix which, of course, it is) http://footballisfixed.blogspot.co.uk/2016/03/webb-of-lies.html.
1) If 'Cash Out' was good for your financial health, why do bookmakers spend so much money on adverts persuading punters to close out positions early?
2) We never close out nor hedge any of our trading positions UNLESS some new information comes to light that EITHER invalidates the position OR adjusts the probability of success to less than the 'cash out' option being offered by the bookie.
3) 'Cash Out' is a win:win for bookmakers. If they believe that your trade is correct and will eventually win then 'cash out' allows them to reduce future losses and improve their book - they even take an extra slice of your profits by scalping the 'cash out' price.
If, on the other hand, they believe that your trade will be a future loser, then they markedly reduce the 'cash out' payout or, in more manipulative cases, prevent you closing out at all.
There is behavioural psychology underpinning all of this.
Prospect theory makes humans have an irrational tendency to be less willing to gamble with profits than with losses.
Punters adapt their attitudes to those others with whom they associate and misinterpret information in a way that seems to confirm their behaviour and attitudes.
Confirmatory bias leads to conclusions being unduly biased by what one wants to believe.
Ignore all the fake mainstream media press about bookies' potential losses on a Leicester City title win.
Bookmakers love outsiders winning.
Bookmakers love outsiders winning even more when they are able to persuade the magic thinking brigade to 'cash out' early due to their distorted perceptions.
The bookmakers shout: "Leicester City were 5,000/1 pre-season.
Leicester City cannot possibly win the EPL.
Bettor better take the money and run."
BT Sport and BBC insiders also traded on Leicester City pre-season.
These people were trading on the inside information included in the above link.
These insiders are not closing out their positions.
Because these people understand that we are dealing with a conspiratorially corrupt market and that Leicester City will win the Premier League this season.
Or, if the worst comes to pass, and UK Anti Doping or some other entity discovers real realities, these insiders know that they will be able to 'cash out' much closer to their projected profit levels.
Mr Pryke made a bum deal.