💰 Kelly Criterion Calculator
Calculate optimal bet size using the Kelly Criterion formula.
Input Parameters
Advanced Options
Results
Bankroll Simulation
Calculation Details
Implied Probability: 0%
Edge: 0%
Expected Value: 0%
Kelly Fraction: 1
About Kelly Criterion
The Kelly Criterion is a mathematical formula that helps determine the optimal size of a series of bets to maximise the logarithm of wealth over the long term. It was developed by J. L. Kelly, Jr. while working at Bell Labs in 1956.
How to Use This Calculator
- Enter your current bankroll amount
- Select your preferred odds format
- Enter the betting odds offered
- Input your estimated true probability of winning
- Adjust the Kelly fraction if desired
- Review the recommended bet size and supporting information
Benefits of Kelly Criterion
- Bankroll Growth: Maximises the long-term growth rate of your bankroll
- Risk Management: Automatically adjusts bet sizes based on your edge
- Consistency: Provides a systematic approach to betting
Kelly Formula
Kelly % = (bp - q) / b
Where:
- b = decimal odds - 1 (net return)
- p = probability of winning
- q = probability of losing (1 - p)
Frequently Asked Questions
What are the limitations of Kelly Criterion?
- Volatility: Full Kelly betting can lead to significant bankroll swings
- Estimation Error: The formula assumes accurate probability estimates
- Fractional Kelly: Many professionals use fractional Kelly to reduce variance
- Applicability: Only works with positive expected value bets
What is fractional Kelly?
Fractional Kelly involves betting a fraction of the Kelly-recommended amount (e.g., half Kelly or quarter Kelly) to reduce volatility while still benefiting from optimal bet sizing. This is particularly useful when probability estimates are uncertain.
Should I use full Kelly or fractional Kelly?
Most professional bettors use fractional Kelly (typically 1/4 to 1/2 Kelly) because it reduces bankroll volatility while still providing good growth. Full Kelly can lead to significant swings and requires very accurate probability estimates.
What if I get a negative Kelly percentage?
A negative Kelly percentage indicates that the bet has negative expected value, meaning you should not place the bet. The calculator will warn you if there is no positive edge found.