Let's Talk Futures
Make sure you have a plan of attack before locking your money up for multiple months
Hey everyone — been a while. I don’t have much of an excuse other than low motivation and some writers’ block. However, with MLB season fast approaching I felt it could be lucrative to write something about futures.
Futures, or outrights, are long-term bets which typically have multiple selection options; think World Series Winner (30 teams) or Player To Hit The Most Home Runs (50+ options). Because there are so many options it’s really difficult to pick the winner… but that means payouts are bigger. WAY bigger.
In my opinion, that’s exactly what you want to target: longshots with large payouts. The reasoning here is that your money will be tied up for months so you want the payout to be worth the lost time. If you’re a savvy bettor with a calculated edge you can think of your bankroll like a money market. If you continue playing your edges you’ll rack up a small percentage return over the course of the season. If you tie up half your bankroll in futures with small potential winnings, you’ve got less to earn on throughout the season. So in order for it to be worth it to bet on futures you want the possibility of a significant payout.
If you’ve read my newsletter before you already know the definition of “value”. That definition doesn’t change for futures — you’re still looking for a price that is larger than it should be. What does change is how you find the asymmetrical upside hidden in futures markets.
That word, upside, is the key. Season-long bets can be extremely volatile, especially in the more niche markets like “player to steal the most bases”. You want to look for a perfect storm candidate, one who, if talent, skill, and situation all overlap, could be near the top of the leaderboards as the end of the season approaches. You want a volatile selection, one who may well lay a goose egg, but every once in a while will be the best.
“Well no shit Ben, I only bet on guys I think could win”. And while that’s a fair point, I’d argue most people are too focused on winning. If you wanted to win, you’d bet the +500 favorite or maybe a popular +3000 mid-level dog. Those can be good picks if they’re drastically mis-priced, but they’re likely already in good situations. What I’m telling you to look for is a bad situation that could turn right. For example:
Jorge Mateo stole 35 bases last season, good for second in the big leagues and most in the American League. This year, though, he is just being looked at as a shortstop who doesn’t hit very well and is slated to bat 9th on a team with Gunnar Henderson who could steal some reps. That evaluation isn’t inaccurate, but Mateo is one of the fastest players in the league who is trusted to run wild. If he can improve his average by 10-20% he’ll have plenty of opportunities to take advantage of the new pickoff rule and larger bases. If he plays as much as he did last season, we could be looking at a 50 stolen base guy.
Now of course that’s wishful thinking. The projection systems have him topping out at 26 SBs, after all. But Mateo is currently priced at 50-1 (FD) when others in the same projection range as him, such as Jazz Chisholm, Tommy Edman, and Jake McCarthy, are priced around 18-1. To me, the upside of a speedster like Mateo is worth a 50-1 shot.
One thing that’s important to note is that I only check the projection systems after looking at prices and coming up with imaginary best-case scenarios for certain players. Projections do not capture upside. Nelson Cruz hit 38 home runs for like 15 years straight, and while that’s an incredibly impressive feat it likely means he won’t hit 50 the next year. He may have had a higher projection in 2019 (let’s say 37) than someone like Ronald Acuña Jr. (let’s say 32), but Acuña’s upside is 50+ whereas a Cruz 45+ season would’ve been an extreme outlier. That’s just an example and the numbers may not be totally perfect, but I’m using it as a reminder to always consider the maximum upside.
So that’s what I’m looking for when examining futures. Look for the 50-1 shot that should be 20-1. Look for the 150-1 longshot who, if a key starter gets injured, all of a sudden becomes one of the top players in the league. Think about the absolute best case scenario, and consider whether the payout is worth a shot that that scenario comes true. Most times it isn’t, but there are certainly some gems out there.
MIDDLES!
The other thing I look for in season-long bets are middles. If you know me, you know I love middles. A middle is when you play the over at one book and the under at another book to create a double-win scenario for yourself, while a loss would only result in about a 5% hit. Below is a thread of examples I tweeted a few weeks ago.
In the above example, both bets hit if Yordan Alvarez hits 36, 37, 38, or 39 home runs. Given the books calculate those numbers using models and bettor feedback, that window of outcomes is the most-likely scenario. Of course he could over/underperform those numbers, but the consequence of such a result is only a few cents on the dollar, while the upside is very large.
I’m fine setting aside some cash for the year if it’s a virtually no-lose scenario, as middles basically are.
They’re also super fun to bet, as you have a very specific outcome to root for (and root against) as the season goes on.
Content recommendation
I recently finished a book called Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely and I’d highly recommend it to anyone interested in behavioral economics.
The book is basically about how we process information and why that information leads to poor decision making. For example: studies have shown we’re less likely to order what we actually want at a restaurant if someone at our table orders it first… why do we subject ourselves to orderer’s remorse simply because someone else ordered before us?
This book is full of strange scenarios that will really make you consider your decision making ability, which is obviously incredibly important in sports betting.
That’s all folks
That’s it from me! I hope your March Madness brackets and bets are going well and if they aren’t I hope you’re looking forward to MLB season as much as I am. Now if you’ll excuse me I’m going to watch some F1, then some March Madness, and finally order some Thai takeout before watching the World Baseball Classic tonight.
If you enjoyed this newsletter please consider sharing or subscribing if you haven’t already! Thank you so much for reading.