Alex Mercer: Welcome to the Ledger Recap for Friday, February 27th. I’m Alex Mercer, and we’re here to look at the tape, grade our portfolio, and refine the algorithm. Joining me as always is our lead analyst, Marcus Webb. Before we dive into the numbers, a quick reminder for the desk on how we handle the books: we track in prediction market units. If we buy a contract at 60 cents, we’re risking 0.60 units to win 0.40. It’s pure risk-based accounting. Marcus, looking at the session stats, we went 14-11-2. We’re in the green, but it’s thin.

Marcus Webb: It’s too thin, Alex. We finished the session at +1.3 units. When you go three games over .500 across 27 positions and only return a little over one unit, it means our pricing capture was inefficient. We’re still sitting at -5.1 units overall. We’re finding the right outcomes, but we aren't extracting enough value from the contracts we’re holding. We’re essentially buying high and selling at settlement rather than finding the mispriced tails.

Alex Mercer: Let’s get into the Film Room. We took a heavy hit on the Spurs-Pistons game on the 23rd. We held three positions there: Wembanyama Over 22.5 points at 54 cents, Cade Cunningham Over 25.5 at 54 cents, and the First Half Under. All three failed to settle in our favor. Cade was the biggest outlier—16 points on a dismal 5-of-26 shooting. What happened to the volume there?

Marcus Webb: It was a systemic failure in our spacing thesis. Because Detroit lacks reliable perimeter threats, San Antonio was able to drop their bigs and shrink the floor. This forced Cade into high-variance contested mid-rangers and floaters rather than clean looks at the rim. He went 5-of-26 because the geometry of the court was broken. On the Wembanyama side, he finished with 21—just 1.5 points off. This is where the prediction market advantage is massive. When Victor was sitting at 18 points early in the fourth, those contracts were still trading in the 80-cent range. We could have sold our position, realized a partial profit, or at least hedged the downside. In a traditional sportsbook, you’re trapped until the whistle. In these markets, holding to a 0-cent settlement on a near-miss is a discipline error.

Alex Mercer: On the flip side, we had some massive wins where we might have been too timid. Look at Jarrett Allen against the Bucks. We bought his Over 15.5 points share and his Over 9.5 rebounds share at 48 cents. He didn’t just clear those; he exploded for 27 points and 11 boards. 

Marcus Webb: That’s exactly where the Aggressive Alpha Review comes in. We were way too conservative. We bought the 15.5-point contract at 48 cents. Given Milwaukee’s lack of interior depth with their recent rotations, we should have been looking at Alt-shares. If we had taken a position on Allen to score 20+ or 25+, we likely could have secured those contracts for 15 or 20 cents. By playing the "safe" line, we settled for a 0.52 unit gain. If we had calibrated our aggression to our conviction, we could have seen a 3x return on the same capital. We left at least 1.5 units of "Missed Alpha" on the table by not laddering those positions.

Alex Mercer: We also saw a huge price discrepancy in the NHL. We took the Oilers-Ducks Over 5.5 goals at just 32 cents. The game ended with 11 total goals. Why was the market pricing an Over 5.5 at a 32% implied probability?

Marcus Webb: The market was pricing in the Ducks' recent offensive slump but ignored the systemic fatigue of the Oilers' defensive pairings on a back-to-back. Tired legs lead to missed assignments and more power-play opportunities. At 32 cents, that was the steal of the week. Again, though, if the implied probability is that low and our model shows a high-scoring environment, we should have sized up. 

Alex Mercer: Let’s talk Strategic Evolution. Our session record was decent, but the PnL is lagging. What’s the update to the Playbook?

Marcus Webb: The data is telling us we have a "Conviction Calibration" issue. We’re winning 56% of our positions this session, but our net gain is marginal because we’re paying too much for "safe" 50-cent contracts. The new rule for the Playbook: If our internal model has a delta of more than 15% against the market price, we must allocate 20% of the position to an aggressive Alt-line. If we’re right about the direction, we need to be right about the magnitude to dig out of this 5.1-unit hole. Iron sharpens iron, Alex. We can’t just be right; we have to be profitable.

Alex Mercer: Accountability is the name of the game. We’ll be back next week to see if the new calibration holds up under market pressure. Before we go, remember that the volatility of these markets requires a disciplined approach to your portfolio. Opinions expressed are for informational purposes only. Bet responsibly.