Volatility

Would it be correct to assume games with extreme volatility while potentially having the ability to send your finances into the dumpster would automatically also have the potential to do the exact opposite? Or is that not a safe assumption? Noted exceptions?

I'm going off intuition and say "yes", with the stipulation that you would have to just be lucky enough to be at the right place at the right time, and that of course if you play it at a very low denomination the "jackpot" won't be as high. Also, that you would probably run out of money before you got lucky enough to hit these jackpots.

Just as an easy example I can think of, (9/6) Double Super Times Pay Triple Double Bonus Poker, Triple Play, at 1$ denomination even, has a volatility of about 196.87.....and that's only one hand I believe, it's still gonna be high with 3 hands.

Get dealt low quads w/ aces or a royal with 20x multiplier and you have 240,000$ right there, of course, most people probably wouldn't get those dealt hands in their lifetime or they would have lost way more than 240k before they got it, but it could happen! I know some people have gotten lucky on it before, I just don't count on my own luck being that good! :').

Quote: rxwine

Would it be correct to assume games with extreme volatility while potentially having the ability to send your finances into the dumpster would automatically also have the potential to do the exact opposite? Or is that not a safe assumption? Noted exceptions?
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There isn’t necessarily a symmetry like that. Broadly you could think of two types of high variance games:

1) Lottery. Super likely to lose a small amount. Very rarely you win a large amount.

2) Martingale. Likely to win a small amount. Occasionally you lose a large amount.

Quote: unJon

Quote: rxwine

Would it be correct to assume games with extreme volatility while potentially having the ability to send your finances into the dumpster would automatically also have the potential to do the exact opposite? Or is that not a safe assumption? Noted exceptions?
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There isn’t necessarily a symmetry like that. Broadly you could think of two types of high variance games:

1) Lottery. Super likely to lose a small amount. Very rarely you win a large amount.

2) Martingale. Likely to win a small amount. Occasionally you lose a large amount.
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But aren't you describing volatility of betting systems here? I mean, if you played $10,000 on the lottery every week, your finances would most likely end up in the dumpster really quick, but there is a slight chance that you wouldn't need to work another day in your life.

Conversely, if you were to martingale a single number on roulette up to the table max, you'd have big losses most of the time, with some occasional big wins.

I think Rxwine's supposition is more or less correct, as far as the volatility of a certain game goes. I don't have any math to back that up, but anecdotally speaking, take Mississippi Stud -- extremely volatile for a table game. The first time I played, I sat with $200 at a $5 table and cashed out $1000 an hour later. The second time I played, I bought in for $200 at the same $5 table, and proceeded to lose it all without winning a single hand.

While I wouldn't consider either of these outcomes "typical," they aren't all that improbable, either. Now, if I claimed either of these scenarios happened, say flat betting $5 at a low variance game like baccarat, well... let's just say that around here, it would be met with vociferous skepticism... and probably a few suspensions! :)

Quote: Joeman

Quote: unJon

Quote: rxwine

Would it be correct to assume games with extreme volatility while potentially having the ability to send your finances into the dumpster would automatically also have the potential to do the exact opposite? Or is that not a safe assumption? Noted exceptions?
link to original post

There isn’t necessarily a symmetry like that. Broadly you could think of two types of high variance games:

1) Lottery. Super likely to lose a small amount. Very rarely you win a large amount.

2) Martingale. Likely to win a small amount. Occasionally you lose a large amount.
link to original post

But aren't you describing volatility of betting systems here? I mean, if you played $10,000 on the lottery every week, your finances would most likely end up in the dumpster really quick, but there is a slight chance that you wouldn't need to work another day in your life.

Conversely, if you were to martingale a single number on roulette up to the table max, you'd have big losses most of the time, with some occasional big wins.

I think Rxwine's supposition is more or less correct, as far as the volatility of a certain game goes. I don't have any math to back that up, but anecdotally speaking, take Mississippi Stud -- extremely volatile for a table game. The first time I played, I sat with $200 at a $5 table and cashed out $1000 an hour later. The second time I played, I bought in for $200 at the same $5 table, and proceeded to lose it all without winning a single hand.

While I wouldn't consider either of these outcomes "typical," they aren't all that improbable, either. Now, if I claimed either of these scenarios happened, say flat betting $5 at a low variance game like baccarat, well... let's just say that around here, it would be met with vociferous skepticism... and probably a few suspensions! :)
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No. While Martingale is a system the lotto is a game. The principle holds. Volatility of a game is a measure of how dispersed outcomes are from the mean outcome. And that equation is indifferent to whether the distant outcomes are positive or negative.

Here’s an example. Below is a fake graph of the possible outcomes of two different games.



Both games have identical volatility as you can see from the graph. But both have very different outcomes. The one on the left has a high chance of a small win and a low chance of a very big loss. The one on the right is the opposite.

Identical volatility. But one has, as OP put it the “ability to send your finances into the dumpster” and the other has the opposite.

Quote: unJon

Here’s an example. Below is a fake graph of the possible outcomes of two different games.



Both games have identical volatility as you can see from the graph. But both have very different outcomes. The one on the left has a high chance of a small win and a low chance of a very big loss. The one on the right is the opposite.

Identical volatility. But one has, as OP put it the “ability to send your finances into the dumpster” and the other has the opposite.
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I see your point, theoretically. However, with the exception of video Blackjack and other non-skewed games, machines in a casino exhibit both left- AND right-skewness. To the players’ POV, they are ALL right-skewed, and to the casinos’ POV, they are ALL left-skewed. Reasoning: Every (skewed) game allows the player to continuously bet a single unit, while paying out from 0 units to some amount much greater than 2 units. Conversely, there is no single game that allows the player to bet widely varied amounts (including 0 units), while only paying only 1 unit each time. The latter describes the casinos’ pattern of “input and output”.

I would say that the OP is correct from the players’ POV. Isn’t that the main draw to gambling for many players?

Quote: camapl

Quote: unJon

Here’s an example. Below is a fake graph of the possible outcomes of two different games.



Both games have identical volatility as you can see from the graph. But both have very different outcomes. The one on the left has a high chance of a small win and a low chance of a very big loss. The one on the right is the opposite.

Identical volatility. But one has, as OP put it the “ability to send your finances into the dumpster” and the other has the opposite.
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I see your point, theoretically. However, with the exception of video Blackjack and other non-skewed games, machines in a casino exhibit both left- AND right-skewness. To the players’ POV, they are ALL right-skewed, and to the casinos’ POV, they are ALL left-skewed. Reasoning: Every (skewed) game allows the player to continuously bet a single unit, while paying out from 0 units to some amount much greater than 2 units. Conversely, there is no single game that allows the player to bet widely varied amounts (including 0 units), while only paying only 1 unit each time. The latter describes the casinos’ pattern of “input and output”.

I would say that the OP is correct from the players’ POV. Isn’t that the main draw to gambling for many players?
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Maybe I’m confused. I agree with your first paragraph (though there are left skewed casino bets, like heavy favorite sports betting).

But your last sentence seems 180 degrees wrong to me. OP asked if it was safe to assume that a high volatility game both can take your wallet to the moon and the dumpster.

Emphatically, “no” is the answer to that question. The answer is yes if the game is not skewed at all. Buy for right skewed games you just lose 1 unit at a time. So you don’t just get to the dumpster because of volatility.

Quote: rxwine

Would it be correct to assume games with extreme volatility while potentially having the ability to send your finances into the dumpster would automatically also have the potential to do the exact opposite? Or is that not a safe assumption? Noted exceptions?
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the answer is yes in completely random no in bingo