Kelly Criterion Betting Tool
Derive the optimal stake from your edge and bankroll, with full, half and quarter Kelly.
How to Use This Calculator
- Begin by choosing the odds format you intend to work in (Decimal, Fractional, or American)
- Enter the odds attached to the bet you are weighing up
- Supply your own estimated probability of the selection winning, expressed as a percentage
- Enter the full size of your bankroll
- Review the Kelly fraction, the recommended stake it produces, and the more conservative half-Kelly and quarter-Kelly alternatives
Formula
Kelly Criterion Formula:
f* = (bp - q) / b
Where:
- f* = fraction of bankroll to wager
- b = decimal odds - 1 (net profit per dollar)
- p = probability of winning
- q = probability of losing (1 - p)
Expected Value = (p x b) - q
Frequently Asked Questions
What exactly is the Kelly Criterion?
The Kelly Criterion is a mathematical formula that pinpoints the optimal stake for a bet, calibrated to maximise the long-term growth of your bankroll while steering clear of ruin.
Is it wise to always stake the full Kelly amount?
Most seasoned bettors prefer fractional Kelly, either half or quarter, in order to dampen variance. Staking the full Kelly amount can produce large swings even when your edge is genuine and well established.
What is the meaning of a negative Kelly value?
A negative Kelly value signals that the bet carries negative expected value. The bet should be left alone, because over time it would steadily erode your funds.
How precise must my probability estimate be?
The Kelly formula reacts sharply to the probability you feed it. Overstating your edge results in overbetting, which is precisely why fractional Kelly is advocated as a built-in margin of safety.