What is your possible profit if flat betting constant amount of money(WAGER) on an option with probability p and PAYOUT from {1,2,5,8,11,17,35} with unit size = UNIT?
BOUNDARY(x) = -WAGER/37 + x*(PAYOUT+1)*sqrt(WAGER*p*(1-p)*UNIT)
Let's say you bet WAGER=5000 and UNIT 1, and you bet on single (PAYOUT=35)
68% of time your profit will end up in an interval <BOUNDARY(-1), BOUNDARY(1)>
BOUNDARY(-1) = -5000/37 - 1*(35+1)*sqrt(5000*1/37*(1-1/37)*1) = -548
BOUNDARY(1) = -5000/37 + 1*(35+1)*sqrt(5000*1/37*(1-1/37)*1) = 277
95% of time your profit will end up in an interval <BOUNDARY(-2), BOUNDARY(2)>
BOUNDARY(-2) = -5000/37 - 2*(35+1)*sqrt(5000*1/37*(1-1/37)*1) = -961
BOUNDARY(2) = -5000/37 + 2*(35+1)*sqrt(5000*1/37*(1-1/37)*1) = 690
99,7% of time your profit will end up in an interval <BOUNDARY(-3), BOUNDARY(3)>
BOUNDARY(-3) = -5000/37 - 3*(35+1)*sqrt(5000*1/37*(1-1/37)*1) = -1373
BOUNDARY(3) = -5000/37 + 3*(35+1)*sqrt(5000*1/37*(1-1/37)*1) = 1103
Now what about having WAGER=5000 and UNIT 5, and you bet on single (PAYOUT=35)
68% of time your profit will end up in an interval <BOUNDARY(-1), BOUNDARY(1)>
BOUNDARY(-1) = -5000/37 - 1*(35+1)*sqrt(5000*1/37*(1-1/37)*5) = -1058
BOUNDARY(1) = -5000/37 + 1*(35+1)*sqrt(5000*1/37*(1-1/37)*5) = 787
95% of time your profit will end up in an interval <BOUNDARY(-2), BOUNDARY(2)>
BOUNDARY(-2) = -5000/37 - 2*(35+1)*sqrt(5000*1/37*(1-1/37)*5) = -1981
BOUNDARY(2) = -5000/37 + 2*(35+1)*sqrt(5000*1/37*(1-1/37)*5) = 1710
99,7% of time your profit will end up in an interval <BOUNDARY(-3), BOUNDARY(3)>
BOUNDARY(-3) = -5000/37 - 3*(35+1)*sqrt(5000*1/37*(1-1/37)*5) = -2904
BOUNDARY(3) = -5000/37 + 3*(35+1)*sqrt(5000*1/37*(1-1/37)*5) = 2633
The greater unit means greater risk, but also possible reward. Enjoy the formula.
Thanks Mr. Ore, this is something people must understand in full, since the larger the sample the harder that is *not* to fall within these ranges: 3 STD range.
Mr. ore: playing 5 units means you play less spins or you wagw more.
Wagging 5000 1 unit each spin or 5 units 1000 spins.
Playing 5 units at the same level of the example you gave us for 1 units mean to wage 25,000 instead of 5000.
It seems that bounderies playing strait bet go from -27.5% to +22%(3sd) of the total waged.
Same formula for a double street play is:
BOUNDARY(-3) = -5000/6.1666 - 3*(31+1)*sqrt(5000*6/37*(1-6/37)*1) =
BOUNDARY(3) = -5000/6.1666 + 3*(31+1)*sqrt(5000*6/37*(1-6/37)*1) =
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[/size]It is that correct?
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[/size]Do they keep similar bounderies?(strait bet and DS)
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