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Outright Strategy

Outright MarketsLevel 3 — Sharp

Prerequisites

Favorite-Longshot BiasBet Sizing

What It Is

Betting on season-long and tournament outcomes (league winners, relegation, promotion, CL winner) — exploiting structural inefficiencies in outright markets, managing capital lockup, and hedging positions as the season progresses.

Correct Execution

You back favorites where model confirms value (exploiting favorite-longshot bias). You size outrights at 5-10% max of bankroll. You buy early when prices are best and hedge/trade out later to lock in leveraged returns. You use two models approaching outrights from different perspectives for confirmation.

Progression Levels

Diagnostic Tree

Coaching Cues

  • "We often buy futures to trade out of them or hedge at a later date." — portfolio mindset, Ted Knutson
  • "Those numbers aren't realistic, but they are probably directionally correct, which is what we care about." — on model outrights, Ted Knutson
  • "I think the Winning Country: Germany is mispriced, largely because Dortmund are not nearly as awful under Kovac and the world hasn't quite clocked it yet." — derivative outright thinking, Ted Knutson

Common Errors

  1. Locking up too much capital in outrights: "My suggestion is not to use more than 5-10% of your total bankroll" → Capital is dead for months → Size appropriately
  2. Never hedging: Riding outrights to zero when hedge could lock in profit → "I'm happy to hedge this betting 400 on PSG to Win the Final so we lock in futures profit" → Learn to hedge
  3. Backing relegated/promoted team outrights on emotion: Model errors on newcomers are large → "Betting outrights on new promoted teams — model typically overrates their quality early season"

Edges

💎 Elite-Only Behavior

Buy Futures to Trade, Not to Hold

outright-marketsoutright-strategy →

Outrights are tradeable positions in a portfolio, not lottery tickets. Ted bought Inter at +975, then hedged against PSG in the final to lock in leveraged profit while leaving upside. This is qualitatively different from "I bet my team to win" — it's using futures markets as financial instruments with entry, exit, and hedge strategies.

What most people do
Place outright bets and ride them to win or bust. Never consider hedging or trading out.
What the best do
Buy early when prices are best, monitor value as the competition progresses, and hedge or trade out to lock in profit at optimal moments.
Why it's an edge: Most outright bettors capture zero value when their team is eliminated or reaches the final. Traders capture value at every stage of the competition through hedging.
How to exploit: When placing an outright, plan your exit strategy upfront. At what price would you hedge? At what stage would you trade out?
"We often buy futures to trade out of them or hedge at a later date. You saw me do this with the Inter outright in the Champions League." — Ted Knutson, MLS Friday + CWC Futures

Sources

  • Ted Knutson, "English Championship Outrights" — sizing rule, two-model confirmation
  • Ted Knutson, "Champions League Semifinals" — hedging Inter CL future
  • Andrew Mack, The Outlier Podcast (2025-11-26) — season win totals still have edge as of 2025 (structural inefficiency confirmed current)
  • Ted Knutson, "MLS Friday + CWC Futures" — buying to trade, hedge methodology
  • Ted Knutson, "Outrights Longshot Bias" — structural market analysis
  • Rufus Peabody, Unexpected Points Podcast/PFF (2020-09-24) — futures simulation, bye week underpricing (~1.5 pts), seeding implications of individual games
  • Rufus Peabody, Betting The Masters (2024-04-10) — golf outright vs. matchup variance mismatch, matchup volume dominance, informational asymmetry at majors