Why Does The Price Have To Be Right??

Often when I have a hot algorithm and a day comes up when there isn’t a play, people ask for the “close” plays. People often incorrectly assume that algorithms pick winners and then weight those winners with values to determine their strength. So why not bet a lesser strength play if the algorithm is picking it to win? It’s because algorithms calculate value not victory.

An algorithm is designed using different variables to tell you the probability of Team X beating Team Y. If the variables calculate that Team X has a 75% probability of winning, it means that Team X should be -300 and Team Y should be +300. At those prices the match would be at fair value. If instead the oddsmaker or the market has made Team X -450 and Team Y +380 then you have value on Team Y. It’s because you are being paid +380 on Team Y which is an implied probability of 20.8%. So you’re being paid as though Team Y has a 20.8% probability but it really has a 25% probability. You are getting 80 cents of bonus value. Conversely, if Team X is priced at -250, you have a value on Team X. At -250 the oddsmaker/market is saying that Team X has a 71.4% probability. However you feel they have a 75% probability. So you are getting a 75% probability scenario and only paying as though it will win 71.4% of the time. It’s all about the price and the values!

I will regularly see people on Twitter say that a sharp would NEVER take a -400 moneyline. While sharp players tend not to like large moneylines, if they calculate a team as having a 90% probability of winning but that team is priced at -400 (80% probability), guess what, they’ll bet it. You bet the values wherever they may be!

Algorithms calculate probabilities which translates into values, not winners. If the price isn’t right, you might win that individual selection but long term you are overpaying and eventually the math will catch up with you.