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Profitability and Variance - SNG vs. MTTs

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  1. Heads Up Abe Heads Up Abe is offline

    Gilbert, AZ
    United States

    Posts: 437
    Joined: Oct 05

    Nov 1st, 2006 (11/1/2006 2:53pm)

    In a recent thread, two players got into a dispute about the "variance" in sngs vs. MTTs. One claimed that you should expect wild swings in sngs and a more smooth flow in MTTs. He asserted that someone who had recently lost a substantial percentage of his bankroll should commit the remainder to MTTs. His primary point appeared to be that you would "spend" far less on MTTs than on sngs.

    The opposing view was that playing MTTs would be even more risky since there is much more "variance" in MTTs than sngs. This argument seemed primarily based on the fact that you would expect to "cash" far more often in a sngs.

    Neither really made their points and it pretty much just became a pissing match.

    Variance and profitability are both important and at least somewhat related. I think it's possible that one was thinking of variance and the other was thinking of profitability. Thus, their disagreement. But....what's the truth?

    Can anyone support one opinion or the other? In other words, what are the risk/reward trade-offs for MTTs vs. SNGs?
  2. darkknyt darkknyt is offline

    Fenton, MO
    United States

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    Nov 1st, 2006 (11/1/2006 3:04pm) in reply to Heads Up Abe

    Over the long run, your profitability or ROI should be higher in MTTs. Variance is variance, no matter whether you play in a SNG or a MTT. The reason why you may notice the variance more in a MTT is because you have to survive more hands in order to get into the money in a MTT. I hope this makes sense.
  3. 77_Urqo_77 77_Urqo_77 is offline

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    Nov 1st, 2006 (11/1/2006 3:14pm) in reply to Heads Up Abe

    Don't clearly understand what you trying to get here but I'll take a stab at this point. The point he is making about SNG's having more varience than MTT's I feel, even if you play just to make the money in MTT's, is false. If you're a good player your hardly ever going to go 15+ buyins without a cash unless your on a downswing while as in a MTT you can be playing extremely well and only make a handful of cashes while busting 99.9% of the time without making the final table and a nice ROI%. Howevere, for profitability I feel MTT's are better. One FT typically gives you a ROI roughly between 750-1500% dependant of tourney size, buy-in etc. And you can go on not cashing out of the next 100 tournys at the same level and still have a high ROI% while for a SNG you can have a rough downswing and the less ROI% for cashing effects the profit you have already made. Don't know if I entirely make sense but hope it gives a rough idea Urqo
  4. Heads Up Abe Heads Up Abe is offline

    Gilbert, AZ
    United States

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    Nov 1st, 2006 (11/1/2006 3:35pm) in reply to 77_Urqo_77

    Sorry if the post was confusing. The last sentence is really what I'm asking about. What are the trade-offs when deciding whether to play SNGs or MTTs?

    Urgo...you are basically saying you trade cashing more often in SNGs for winning more in the long run in MTTs? So playing SNGs would reduce the volatility in your bankroll, but overall you would have a lower ROI. So....greater risk in MTTs....greater potential reward.

    I think that's probably the conventional wisdom, the first guy in the debate saw things differently because you would spend less on MTTs. I still don't really understand his point.
    Thread Starter
  5. jay_shark jay_shark is offline

    NY
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    Nov 1st, 2006 (11/1/2006 3:47pm) in reply to Heads Up Abe

    Var(X)=E(X^2) -(E(x))^2

    E(x) = the expectation of a random variable X .

    According to my calculations Mtt's are more volatile and hence there is more variance involved . Your $/h standard deviation is much lower playing in a sng .

    By the same token , a limit hold em's standard deviation is much lower than a nl players s.d .
  6. Heads Up Abe Heads Up Abe is offline

    Gilbert, AZ
    United States

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    Nov 1st, 2006 (11/1/2006 4:03pm) in reply to jay_shark

    LOL...jay shark must be correct...there's an equation and all.
    Thread Starter
  7. pokerisnice pokerisnice is offline

    Santa Rosa, CA
    United States

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    Nov 1st, 2006 (11/1/2006 5:32pm) in reply to Heads Up Abe

    While there can be lots of variance in sng play, the variance encountered playing MTT and cash games is FAR greater.
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