Discussion: blocks of SnGs - tranfering only part of staked money

    • YourDoom
      Joined: 21.08.2010 Posts: 878
      Just got idea - why to tranfer all staked money when buying block of SnGs when eg. 25% should be enough because ROI bellow -25% is EXTREMELY unprobable?

      Example for explanation -

      Skilled pokerstrategist (seller) want to move limit up and reduce impact of variance so he decide to sell 50% of himself for 1k SnGs (10+0.5s). Overstacked micro grinder (buyer) decide to buy 1% of those 1k SnGs. Mark-up is 1%.

      Standart way: buyer will send $106.05 (10.5*1000*0.01*1.01) to seller, he will play 1k SnGs and send 1/100 of winnings back - in case of ROI 5% seller will send $110.25 back and deal is concluded.

      My Idea: buyer will send just 25% of buy-in money + mark-up (10.5*1000*0.01*(0.25+0.01)) which is $27.30 in this case of 5% ROI he will get back 30% of buy-in money ($31.50)

      In both cases original money +$4.20 profit was transfered back to buyer, so what are advantages and disadvantages of my idea?

      Buying part of someones play will not block too much money from buyers bankroll.
      When seller sends money back after stake he will be less restricted by dialy sending limits etc.
      Is seller scams buyer its for less money
      Leverage and its benefits

      if ROI will really drop bellow -25% then seller take full impact from loss over -25% (25% is just example, but it imo enough to make this situation nearly impossible, to compansate for this risk seller can for example ask for 0.01% mark-up or just take it as his risk)
      Leverage and its risks

      This is ofc possible only when buying blocks of SNGs, not for individual tourneys etc.
  • 2 replies
    • arisko
      Joined: 23.09.2009 Posts: 392
      Why would the seller take the full impact? The buyer would get nothing back if seller plays at -25%ROI. The Buyer gets the nice advantages, but has to take the disadvantage of getting 0% of investment back.

      Have I understood anything wrong or is this correct?

      This of course is a classical example of what people do with stocks, options and all that. It's just applied to poker staking. Very risky, but very exciting also :)
    • YourDoom
      Joined: 21.08.2010 Posts: 878
      arisko: if he ends at eg -28% then full impact just from those 3% bellow -25%. (or they can agree that buyer will send additional 3% - but I can see how happy he wil be)

      Of course this is application of financial derivates to poker staking.

      Primary goal of this is NOT to add leverage but to reduce amount of money that is transfered which have only benefits. (after all You are still buying something worth $106.05 even when You are paying just $27.30 and agreeing to pay remaining $78.75 at the end of contract)