Kelly criterion calculator

How the Kelly criterion works

The Kelly criterion is a formula for sizing bets when you believe you have an edge. It gives the share of your bankroll that grows it fastest over the long run, assuming your win chance is exactly right. A bigger edge means a bigger stake, and no edge means no bet.

The Kelly formula

Take your edge, which is the win chance times the decimal odds minus 1. Divide it by the net odds, which is the decimal odds minus 1. The result is the share of your bankroll to stake.

Worked example

You have a bankroll of 1,000, the odds are 2.00 and you think the bet wins 55% of the time. Your edge is 0.55 x 2 - 1, which is 10%. Divide by the net odds of 1 and full Kelly says to stake 10%, or 100. Half Kelly is 50 and quarter Kelly is 25.

Why most bettors use a fraction of Kelly

Full Kelly leads to big swings, and it punishes mistakes: if your true edge is smaller than you think, the stake is too large. Half and quarter Kelly give up some growth for a much smoother ride, which is why the calculator starts at quarter Kelly. No staking plan can turn a bet without an edge into a good one, and you should only stake what you can afford to lose.

Not sure about your edge? Check a price with the expected value calculator, or see what your actual results add up to with the ROI calculator.

FAQ

What is the Kelly criterion in betting?

It is a formula that sets your stake as a share of your bankroll, based on the odds and your win chance. It aims for the fastest long-term growth, and it only works if your win chance is accurate.

What is the Kelly formula?

The stake share is the edge divided by the net odds: (win chance x decimal odds - 1) divided by (decimal odds - 1). A 55% chance at 2.00 gives 10% of your bankroll.

Should I use full Kelly or a fraction?

Most bettors who use Kelly choose a fraction, often half or quarter, because win chances are estimates and full Kelly leads to large swings. A smaller fraction also limits the damage if you overrate your bets.

What if Kelly says zero?

A result of zero means the odds do not offer an edge at your win chance, so the formula says not to bet at that price.

How is Kelly different from flat staking?

Flat staking uses the same amount or share on every bet. Kelly changes the stake with each bet, staking more when the edge looks bigger, so it relies much more on your estimates being right.