Kelly Criterion Calculator

- May 10, 2025
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Calculate optimal bet sizes using the Kelly Criterion formula. This calculator helps determine the percentage of your bankroll to wager to maximise long-term growth while managing risk.

Betting Parameters

£

Bet Information

%

Advanced Options

(1 = full Kelly)

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.

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 rather than arbitrary bet sizing.
Limitations and Considerations
  • Volatility: Full Kelly betting can lead to significant bankroll swings.
  • Estimation Error: The formula assumes you know the true probability of winning, which is rarely the case.
  • Fractional Kelly: Many professional bettors use fractional Kelly (such as Half-Kelly or Quarter-Kelly) to reduce variance.
  • Applicability: Kelly works best for bets with a positive expected value; it will recommend not betting when there's no edge.
How to Use This Calculator
  1. Enter your current bankroll amount.
  2. Select your preferred odds format and enter the betting odds offered.
  3. Input your estimated true probability of winning the bet.
  4. Choose a Kelly fraction (less than 1 for a more conservative approach).
  5. Click "Calculate" to see the recommended bet size and supporting information.

Understanding the Kelly Criterion

The Kelly Criterion is a simple yet powerful method for deciding how much to bet. This formula helps you find the optimal bet size based on your chances of winning. By using this approach, you can grow your bankroll over time while keeping your betting strategy smart and efficient.

Introducing the Kelly Criterion Calculator

The Kelly Criterion Calculator is a handy tool designed to help you determine the best betting amounts. It takes into account your current bankroll, the odds format, and your estimated win probability. This way, you can make informed decisions and bet wisely without risking too much at once.

Benefits of Using the Calculator

  • Maximised Growth: It helps to grow your bankroll over the long haul.
  • Risk Control: The calculator adjusts your bet sizes based on your advantage.
  • Systematic Approach: It provides a clear method for placing bets rather than guesswork.

Inputting Your Betting Parameters

To use the calculator effectively, you need to fill in specific information. Start with your current bankroll amount, select your odds format, and enter the betting odds. Then, provide an estimate for your true win probability. This information helps the calculator give you tailored results.

Advanced Options for Precision

The calculator also offers advanced options to refine your results further. You can choose a Kelly fraction to adjust your strategy, select the number of decimal places for finer accuracy, and even view detailed calculation steps. This flexibility allows users to tailor the experience to their needs.

Interpreting the Results

Once you run your calculations, the results will display essential information. You'll see the recommended bet size as a percentage of your bankroll, the edge you have over fair odds, and the expected value per wager. Understanding these results can greatly influence your betting decisions.

Visualising Bankroll Growth

A unique feature of this calculator is the bankroll growth simulation chart. It shows how different betting strategies impact your bankroll over time. By comparing Kelly betting, Half Kelly, and Other methods, you can visualise potential outcomes and choose the best strategy for your goals.

Limitations of the Kelly Criterion

  • High Volatility: Full Kelly betting can lead to large swings in your bankroll.
  • Estimation Risks: It requires accurate probability estimates, which can be tricky.
  • Fractional Strategies: Many bettors prefer using a fraction of Kelly to reduce risk.