To be honest I am not sure that bookies are delta neutral. In theory their approach may be just to be a middleman (Not sure about legal stuff when they are a counterparty)
But even 7 years ago some bookies had really impressive ability to set premarket lines that gave no edge to bettors. It was thanks to extensive databases of bigdata about the games, players etc. Not to mention top analysts.
For over 5 years I've studied top tipsters of many sports and the only edge one could get was in lower , regional leagues - but then you had really big problem with liquidity. (Not to mention if you were a consistant winner, bookies just refused to offer their services to you)
So my conclusion is they might've been taking the other side if they saw good enough edge.
Right, I mean, practically speaking, if you have the absolute best models in the business, you are going to actually have it optimal at times to leave a line unhedged and let it push against the true 50/50. I have seen the most success not using models to generate lines, but rather figuring out which lines are skewed and which aren't. But, I figured the live odds thing was a fun bit of relation to the gamma sensitivity of an ATM option. The world of betting is quite murkier given the legal protections of being the house and the right to refusal - after all, if I find some options and find out Warren Buffett is on the other end, I can't just take them back, but bookies essentially can.
To be honest I am not sure that bookies are delta neutral. In theory their approach may be just to be a middleman (Not sure about legal stuff when they are a counterparty)
But even 7 years ago some bookies had really impressive ability to set premarket lines that gave no edge to bettors. It was thanks to extensive databases of bigdata about the games, players etc. Not to mention top analysts.
For over 5 years I've studied top tipsters of many sports and the only edge one could get was in lower , regional leagues - but then you had really big problem with liquidity. (Not to mention if you were a consistant winner, bookies just refused to offer their services to you)
So my conclusion is they might've been taking the other side if they saw good enough edge.
Right, I mean, practically speaking, if you have the absolute best models in the business, you are going to actually have it optimal at times to leave a line unhedged and let it push against the true 50/50. I have seen the most success not using models to generate lines, but rather figuring out which lines are skewed and which aren't. But, I figured the live odds thing was a fun bit of relation to the gamma sensitivity of an ATM option. The world of betting is quite murkier given the legal protections of being the house and the right to refusal - after all, if I find some options and find out Warren Buffett is on the other end, I can't just take them back, but bookies essentially can.
maybe they are making off salience/fandom/optimism as well, it'd be silly to discard an edge just to remain neutral.