Is your cash-out offer fair?

Why a cash-out offer is almost never fair

Cash out looks like a courtesy. It is a market. The book is buying your ticket back, and like any buyer it wants to pay less than the thing is worth. The offer already has margin baked into it — usually more margin than the original bet carried, because the book knows most people never check.

Working out the real value

A live bet is worth the probability it wins multiplied by what it pays. Take the current two-way live market, strip the vig from it, and you have the honest probability. Multiply that by your total return — stake times the decimal price you took — and that is what your ticket is worth right now.

Example: $100 at +200 returns $300 if it lands. Your side is now −150 with +130 the other way. Raw implieds are 60.0 and 43.5 percent, which sum to 103.5. De-vigged, your side is 58.0 percent. The position is worth 0.58 × $300, or about $174. A $150 offer is a 14 percent haircut — you are handing back $24 for the convenience.

The alternative you already have

Anything a cash out does, a hedge does more transparently. Lay enough on the other side to equalise both branches and you lock a number you can compute in advance. If that locked number beats the offer — and it usually does by several percent — the offer is simply worse. The exceptions are when the other side is unavailable, illiquid, or the two-way price is much wider than the one the book used to build its offer.

Reading the haircut

• Under 3 percent: fair enough. Take it if you want out.
• 3 to 8 percent: typical. Hedge instead when both sides are liquid.
• Over 8 percent: expensive. You are paying a real fee for a button.

Partial cash outs and the habit they build

Many books let you take part of the position off. That is often the sensible middle: it protects you from the worst branch without surrendering all the upside. The larger danger is behavioural. Cashing out repeatedly on winners while letting losers run to the whistle is one of the most reliable ways to turn a break-even record into a losing one. Decide the exit rule before the game starts, not while you are watching a lead wobble.

A note on the numbers here

This calculator de-vigs proportionally and assumes the live prices you enter are executable. On thin in-game markets both assumptions can be optimistic. Treat the fair value as a benchmark to judge the offer against, not as a guarantee of what you could get.