Kelly Criterion Calculator

Kelly Calculator Info

The Kelly Criterion is a mathematical formula used to determine the optimal fraction of a bankroll to wager on a standalone bet, with the goal of maximizing long-term wealth growth. You can calculate Kelly from either the “true probability” or the “true odds” of the event. Editing either Probability or True Odds automatically updates the other.

Since the true probability of a wagering event is usually a best estimate, full kelly (1.0) is not likely a good idea. Quarter kelly (0.25) might be advised.

Odds: The odds of the bet.
Probability: The probability the bet wins.
True Odds: The fair or true odds of the bet.
Kelly Multiplier: The fraction of the Kelly calculation to wager, [0.0, 1.0].
Bankroll: Total supply of money allocated to wagering.
Odds Format: Specifies the format used in odds fields.

Math

From Probability

f = \frac{edge}{odds} = \frac{b p - q}{b} = p - \frac{q}{b}

f: The fraction of your bankroll to bet.
edge: The edge as a decimal.
odds: The net fractional odds of the bet.
b: The net fractional odds of the bet.
p: The probability the bet wins.
q: The probability the bet loses.

From Odds (Shortcut Kelly)

f = \frac{b - b_{0}}{b (b_{0} + 1)}

f: The fraction of your bankroll to bet.
b: The net fractional odds of the bet.
b₀: The net fractional true odds of the bet.

Web Links

Kelly criterion

Book Links

As an Amazon Associate I earn from qualifying purchases.