Quick Note On Managing Risk When You Fat Finger It

Sometimes you take the wrong bet by accident. Maybe you selected the wrong team and you didn't double check your bet before sending it. Maybe you hit an extra zero by mistake. Maybe you made two selections and your betting platform assumed you wanted to parlay the two (this happened to me on my very first day of BetOnline, I had to get in contact with staff to undo the bet). Perhaps even you placed a bet twice because you forgot that you already placed it yesterday (I've done that too). For whatever reason, mistakes happen and sometimes said mistakes expose you to risk that is beyond that your bankroll management allows.

There are a couple of simple ways to rebalance your positions at the cost of the overround. If you are on a tradeable bet platform, it's as simple as selling your position. If you are on a platform that doesn't allow you to cash out (such as BetOnline), this is where it can be more tricky. The method however is to Dutch the bet - take out proportional positions on the other outcomes until you arrive at the same returns no matter the outcome. So if you bet on a team to win and you didn't intend to take that bet, all you have to do is convert every outcome odds to implied probability (one divided by decimal odds) and take out positions on all the other outcomes in corresponding ratios.

For example, if you have a team A at +180 and team B at -220, decimal odds are 2.80 and 1.45. Implied probabilities are 35.71% and 68.75%. These add up to 104.46%, for an overround of 4.46%. If you accidentally bet 50 on team A, then if you place 50 * (68.75/35.71) = 96.26 on team B, then you will have a total stake of 146.26 between both. No matter which team wins, you'll get back about 139.50 afterwards (rounding errors apply), which is a loss of roughly 4.4%. This is not nice because you've already eaten up your margin most of the time, but it's not about taking profitable trades 100% of the time, it's about managing risk sensibly so that you can be wrong here and there and still make a profit.

A couple of bonus considerations: if there are multiple outcomes, Dutch them in proportion along the lines described above. Warning, the overround can get very big with multiple choice outcomes If you are on an exchange like Polymarket, there are rare occasions where the difference between bid and ask on an individual outcome is so big that it is more profitable to buy no on everything else. Because there are multiple no outcomes that can hit, the maths of Dutching through nos is more involved so I won't leave it here. In principle, you can do it and I occasionally do it when I'm trying to mimic a position that's available on Kalshi but not directly available on Polymarket. Finally, Dutching requires you to have enough account balance to cover the entire spread of positions so be careful with that, especially if you are Dutching nos.

In conclusion, the best way not to overexpose yourself to unnecessary risk is to double and triple check all your bets before you send them, ask yourself if they make sense and be aware of whether or not you have the options to manoeuvre yourself out of a fat finger. Since there is always a non zero risk that you'll mess up a bet, best way to get out of that position is to sell it and if that's not an option, Dutch it.