Monday, September 1, 2014

Correction....

Hey Guys!

So my last blogpost about what the 1st set price should be turned out to be very interesting. I was wrong in my calculations, they where no good. But I love being wrong cause then I have a chance to get it right! =)

Thanks to Rico for his input but also the rest of you guys making it a good discussion.

This is Rico's explanation and it might seem a bit complexed but nothing overwhelming. This is how you should do it!

"Let's say we know match odds for player A are 1.6 and we want to find set odds (assuming these stay constant during the match). 

There are three ways for player A to win, he can win by 2-0 or by 2-1 after winning set 1 and losing set 1. Let's say his odds to win a set are x, then his chance to win by 2-0 is x^2. His chance to win 2-1 after winning set 1 are x*x*(1-x)=x^2-x^3 and this is the same for winning 2-1 after losing set 1. 

We can sum these three chances and get to the total chance of 3*x^2-2*x^3 . We now have to find the value of x where this sum is equal to 1.6 and by using the solver in Excel you can fnd that x=58.75% ."

Spot on. Im not a excel master at all. It took me sometime to figure it out but if I can do it. Everyone could do it using google to search for excel help.

One thing to keep in mind is that these 1st set theoretical prices is just viable if the starting price odds was correct from the start (that the market had valued the match correctly from the start). Also, a lot of stuff happens during a set and market will adjust and correct itself a lot and there for the set price usually isn't what the calculated theoretical price is when the first set is finished.

Stay Sharp!

/Sammy