## How the 49ers Are Like In-the-Money Options

### Playing the money line on the Big Game

by 1/25/2013 7:27 AM

Welcome to the saddest sports weekend of the year … the one where you realize there's only one real football game left until September.

But hey, at least they give you about 4,000 ways to wager on it, from box pools to prop bets on everything from Beyonce's wardrobe to the quantity of Darren Rovell tweets.

Honestly, the non-game-related props feel like better deals, in that you might have some insight into some aspect of the production.

As to the game itself, here's a basic one. If you like the 49ers, you should go with the money line; if you like the Ravens, you should take the points. The 49ers are currently favored by 3.5, and that's expected to either hold or go to 4 points between now and the game. On a typical game with a 3.5-point spread, the favorite has a 64.27% chance of winning the game outright, as per the calculator on SBR Forum. That translates to a money line of about negative 180, meaning that to win \$100, you would theoretically have to wager \$180 on the Niners. Right now, though, you can get the Niners to win for as low as negative 170.

The reverse logic, of course, works on the Ravens. The best number looks like +160, but it's worth +180, so you're better off just taking the points.

Why the disparity? Well, one reason would be the overall scoring level. The SBR number is for a typical game, but if the scoring level is high, each fractional point on a point spread has marginally less value.

It's exactly the same principal as what happens to options' deltas as volatility rises. In-the-money options, i.e. "the favorite," would see their deltas decline, while out-of-the-money options would see their deltas expand.

But that's not really the case here. The over/under is 47.5, barely above the typical scoring level in an NFL game this year.

It has more to do with the typical "order flow" of a Super Bowl. Gigantic sums of money are bet on the game, and money-line bettors tend to go with the underdog, while point-spread bettors go with the favorite as per Linemakers on Sporting News.

What the sports books usually need is for the favorite to win but not cover, an outcome known as the bookmaker's dream. The biggest win for Nevada in Super Bowl history occurred when the Eagles got a late backdoor touchdown against the Patriots in 2005. The Patriots won 24-21, but were 7-point favorites. The books won \$15.4 million on that game because the majority bet the Eagles on the money-line and the Patriots on the point-spread.

And here's one game-related prop that sounds interesting, "Team to Score First Wins Game." The market is -160, +140, implying there's a 40% chance the team that does not score first ends up winning the game. That sounds about right for a regular-season game, and it's right for the entire history of Super Bowls, as the team scoring first has won 29 of the 46 games (63%). But it's only 15-15 in the last 30 Super Bowls, meaning those overall numbers come courtesy of all the early Super Bowl blowouts. This one's not expected to be one-sided.

Disclaimer: The views represented on this blog are those of the individual author's only, and do not necessarily represent the views of Schaeffer's Investment Research.