Have you ever wondered what the action is like at a casino or betting site when the price is −240 (also known as ‘full bodied’ or ‘in the money’)?
That is the case in a number of markets where there is no market interest when the price is in the region of −240. In other words, there is no difference in price between buying and selling the underlying asset.
On one end of the spectrum, you have markets where the price moves only in one direction, such as the S&P 500 equity index or the gold price. In these markets, a −240 bet pays out −240, and a +240 bet loses. There is no middle ground; you either win or lose. At least, not usually. One important exception is Pai Gow poker, which we will discuss further down.
On the other end of the spectrum, you have markets where prices can move in either direction, such as stocks or forex (FX). In these markets, a −240 on a stock or FX bet will result in a tie, sometimes known as a ‘zero-sum game’. What does that mean for you as a gambler? It means that if you win, then the other side loses, and vice versa. The difference is, in most cases, you will make back your investment (minus processing fees), but in some you will lose money. For example, in a bear market, the price of an FX or stock bet will likely decline, and you will lose money due to the tie.
Why Do Markets Trade In Ties?
This is something that happens quite frequently on online betting and casino websites. It is not because of any kind of shady dealing, but due to the complicated nature of some markets. Take the case of stock and FX markets, for example.
If you are new to this, then it can be difficult to know what the ‘fair’ price is for any asset. The problem is that there is no clear indication as to which direction prices are going in. For example, say you are thinking of placing a £10,000 bet that the S&P 500 will rise over the next six months. It would be a great opportunity to make some profit, but you don’t know whether or not the market is in a state of decline or rise. The answer is that it depends on the phase of the moon and the actions of a few prominent market participants.
This is where the zero-sum gaming comes in. When you place a bet on the S&P 500, the online bookie or casino will take a slice of that bet and immediately put the same amount of money on the opposite side. In this example, they would take the £10,000 you have bet on the S&P 500 and put a similar amount of money on the S&P 500 index six months from now. Of course, this is an extremely simplified explanation, but it serves our purposes here. It means that if you are correct in your prediction that the S&P 500 will rise, then the online casino or bookie will automatically win your £10,000 plus the initial £10,000 they have on opposite sides. Similarly, if you are correct in your prediction that the S&P 500 will decline, then they will lose your £10,000 plus the initial £10,000 they have on opposite sides. In almost all cases, you will come out ahead in terms of money management regardless of whether or not the price moves in the same direction as you predicted. There are, however, some risks involved in these types of investments, as we will discuss further down.
Pai Gow Poker Is One Of The Few Exemptions To The Rules Of Ties
Pai Gow poker is one of the few exceptions to the rules of zero-sum gaming. This is thanks to the bet structures involved in the game. When you play Pai Gow poker, the house edge is a lot smaller than in other games, making it a more favourable option for high rollers. If you are new to the game, then start with a £100 and bet £10 at a time. Then, once you are familiar with the game, go up to £200 and £20, and then £400 and £40. The beauty of this is that even though you are playing against the casino, there is still an element of risk associated with each bet.
The game has two parts, commonly known as the ‘draw’ and the ‘peek’. In the draw, you are simply trying to win as much money as you can while abiding by the rules. The main rule in the draw is to match the number of cards in your hand with the number of cards the dealer has. In the peek, you are taking a ‘snapshot’ of the cards the dealer has and using that to make your best guess as to what will be dealt in the upcoming draw. Mathematically, this is a very favourable game for high rollers as the house edge is small. Even in a nutshell, this game has a lot to offer. We recommend trying it out at least once in your life. Just know that it is a game of chance and not a game of skill, so be careful what you are betting on and only bet what you can afford to lose.
Summing Up
When it comes to betting and casino games, there are a lot of intricacies that can be confusing to a newcomer. Although the concept behind placing a bet is fairly simple, there are a number of variables that can affect the outcome, especially when the price is in the region of −240. Trying to work out the ‘fair’ price of an asset without taking into account the phase of the moon, the actions of prominent market participants, or the rules of a game you have never played before can be difficult and lead to bad decisions. Just keep in mind that there are a lot of sharks in the water when it comes to betting and casino games, and that you should always be wary of dodgy dealings when playing online with a stranger. In rare cases, people have been known to get burned by getting involved in such shady activities, but for the most part, you will come out ahead playing legally and above-board. Good luck!