How to use the Kelly Criterion Calculator?
The Kelly Criterion sports betting calculator is used for sports betting, to weigh the odds of winning or losing a bet, so that you can make an informed decision on how much of your bankroll you should wager in order for you to receive maximum returns. This is especially useful as the calculator eliminates any guesswork and helps you make strategic choices, improving bankroll management in the process.
To use the free Kelly betting calculator, you need to enter certain details as input details and the calculator would give you the outcome. These details include your bankroll (the amount of money you have in your online betting sportsbook account), the odds and the estimated probability of winning.
What output does the Kelly Criterion Calculator give out?
By entering the above mentioned details, you can generate the results of the calculator and the Kelly criterion sports betting calculator will tell you how much money you should invest on your bet on a certain betting event to maximize your profits.
Step-by-Step guide to using the Kelly Criterion Calculator
Let me now guide you through the step-by-step process of using the Kelly Criterion betting calculator for a better understanding of how you can use it:
The Kelly Criterion calculator uses the following formula to generate the output:
Now to understand the meaning behind this formula, here’s what each letter stands for:
| Letter | Meaning |
| f | The betting size based on a percentage of your bankroll. |
| b | The bet’s decimal odds - 1 (Example: 4.0 odds - 1 =2 ) |
| p | The probability of winning the bet (Example: 40% chance = 0.4) |
| q | The probability of losing the bet, which is 1 - p (Example: 1 - 0.4 = 0.6) |
Now that you have all the knowledge about the input data, you can calculate the amount of money you should wager with for maximized profits.
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Some examples
Now, let us look at some examples of how this betting calculation system works for familiar sports betting events. This would give you a better idea of how this result is calculated, so that you can do the calculation using the free Kelly betting calculator to calculate your own betting odds.
- Suppose The Indiana Pacers have +250 odds (3.5 decimals)
- Then we will calculate +250 odds = 28.6% probability of winning.
- You can then use a skill called handicapping to assess the chances of winning and say that the team’s actual chances of winning is 35%
- So, now, p = 0.35 and q = 0.65.
- If we equate this with the formula for Kelly Criterion Calculator: 0.09 = (2.5 x 0.35 - 0.65) / 2.5
- Thus, you should bet 9% of your bankroll to have the best outcome.
Let’s take a look at another sporting event example to firmly affirm the calculator’s workings:
- The odds for the Chicago Bulls winning is 3.20 (+220).
- So the implied probability according to this would be 31.3%.
- You can then handicap this probability by supposing it at 2.80 (+180). This would take your estimated probability for winning at 35.7%.
- Now, we can arrange our input data as follows: b = 2.2 (3.2 - 1), p = 0.36, q = 0.64.
- Putting our input data into the formula: 0.069 = (2.2 x 0.36 - 0.64) / 2.2
- Therefore, you should bet 6.9%of your bankroll on this bet.
With all this information and a knowledge about the formula, you can make your own calculations. Or you can find a free Kelly betting calculator online, enter all the input variables and hit calculate to get your outcome easily, so that you can make an informed decision.
Kelly Criterion betting explained
Like many betting calculators out there, the Kelly Criterion calculator uses the provided information and gives the best possibility of how much you should bet in order to get the maximized profit for your winnings. However, like with anything else, there are certain things that you should keep in mind while using the Kelly calculator.
Pros and Cons of Kelly Criterion Calculator
Pros & Cons
- Unique strategy to determine bet size.
- Helps improve bankroll management
- Alternative methods available to lower risk.
- Popular among professional bettors.
- Requires modifications to minimize risk of loss.
- Handicapping skill required for better results.
Modified quarter and half system
As this formula requires you to play with a higher percentage of your bankroll, you must be careful. But there is no need to panic, as you can use the modified quarter or half alternative methods to lower the risk of losing your bet.
- Half Kelly Criterion -
Simply divide your bet size (f) by 2, making it half of what the formula determines.
- Quarter Kelly Criterion -
Similarly, for a modified quarter method, divide the bet size (f) by 4.
These two methods are especially suitable for new bettors who may not want to start wagering with a big investment at first. They can easily be adjusted to suit your personal bankroll and risk tolerance.
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Why is the Kelly Criterion Calculator useful?
The Kelly Criterion calculator is useful for new and experienced bettors alike. I’ve outlined a few key benefits of using this calculator below to help you get a clearer picture of why a Kelly calculator can provide a helpful tool in your betting strategy.
Helps to calculate optimal bet size
Most bettors don’t put much calculation into their wager sizes while placing bets. They consider their bankroll and put a small portion of it for the bet. Consequently, they are in danger of risking too much on unfavorable outcomes, as they fail to maximize their winning by calculating the most profitable bets.
Here is where the Kelly Criterion sports betting calculator comes to the rescue. It accurately calculates the optimal bet size for you to wager in order to maximize the potential returns should your bet win
Improves bankroll management
The Kelly Criterion calculator can help you manage your bankroll more effectively by offering valuable insights in how much you should ideally wager in order for you to benefit from the best possible returns. This may prevent you from wagering too much, thus depleting your bankroll too quickly
Helps build a solid betting strategy
Many sports betting enthusiasts will agree when I say that simply diving in and placing your bets without prior research and consideration is usually a pretty foolish thing to do. By making use of
betting calculators
you can improve your overall knowledge of the betting process, learn about odds and potential outcomes as well as adjust your personal betting strategy to suit your goals.
A betting calculator saves time and is more reliable
Manual calculations are usually pretty time consuming. Plus, there’s always the possibility of making a mistake during your calculations. Using a Kelly Criterion calculator not only saves time but also eliminates many potential errors that could arise if you were to do your calculations by hand. Of course, you’ll have to make sure that all your inputs are correct. But, if they are, the calculated results offer valuable information for improving and adjusting your betting strategy.
What Other Betting Calculators are available?
While the Kelly Criterion calculator is advantageous for determining what percentage of your bankroll you should bet with, there are also other betting calculators available out there, each used to calculate different outputs. So, let us see some of them:
Arbitrage betting calculator
An
arbitrage betting calculator
is very useful for bettors who bet on more than one event simultaneously. This calculator allows you to enter the odds of two or more sporting events to determine how much money you should bet on each to make a profit. With this knowledge in mind, you can make an informed decision and cut back on the risk of losing money.
A
fair odds calculator
assesses the implied probability of a 2-way bet outcome, after removing the vig from it. The vig is a percentage that bookmakers apply to the odds so as to make it less favorable than the actual winning probability. Thus, by comparing the fair odds to the sportsbooks odds, you can see the actual odds of you winning the bet, and can evaluate a profit if the fair odds is more than the sportsbook odds.
ROI is short for Return on Investment. A bet is like an investment where we spend money and expect a profit in return. ROI helps us equate how much profit or loss we can expect from the bets placed. Similarly, the
betting ROI calculator
helps you determine the expected profit or loss on a given bet. All you need to do is input the bet size, the odds, and your estimated probability of winning. Then, the ROI calculator will tell you the implied probability of winning, the expected return and the ROI as a percentage of the bet size.
Here’s a quick overview of all other betting calculators and their key benefits for you:
| Calculator | Best for |
| Arbitrage betting calculator | Calculating how much you should stake at two different sportsbooks to make a profit or minimize losses |
| Fair Odds calculator | Calculating the actual odds of you winning a bet compared to the odds offered by the bookmaker |
| Betting ROI calculator | Helping you determine the expected loss or profit on any given bet |
With the availability of plenty of calculators out there, including the Kelly Criterion sports betting calculator, you can make smarter decisions on how much to stake in order to receive the best potential return for your bet. While manual calculations may be laborious and error-prone, the Kelly calculator takes the guesswork out of a complex formula. Simply input your odds and implied probabilities of winning/losing the bet and you’ll be presented with the optimal amount to wager on your bet. Of course, you shouldn’t just blindly trust the calculator and also assess if the amount fits your overall budget and bankroll management. But, by using the Kelly Criterion formula, you can make more informed decisions and ultimately improve your own betting strategy.
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FAQs
🤔 Who created the Kelly Criterion?
John Kelly was the inventor of the Kelly Criterion formula. He came up with this formula for long-distance telephone signals, but later realized that the formula could be used for investments and money management, and thus, a new era was born.
📊 What is the Kelly Criterion betting strategy?
The Kelly Criterion is a mathematical formula used by bettors to help them make an optimal bet by equating how much money from their bankroll they should stake for a favorable outcome. Bettors also apply the modified half and quarter methods to cut back on the risk of a loss even further.
⚙️ How does the Kelly Criterion calculator work?
The Kelly Criterion sports betting calculator requires you to enter certain variables including, the bet’s odds, estimated probability of winning, probability of losing into its formulaic framework. The formula then works its charms and tells you the optimal bet size.
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