Calculator for Kelly Criterion

Calculation of stake sizing proportional to the estimated mathematical advantage (Edge) over the market.

CURRENT BANKROLL Total amount available for management

Decimal ODD

Odds Offered by Bookmaker

Estimated Probability (%)

Your prediction for the winner

Kelly Fraction (Aggressiveness)

Stake Sizing

Kelly Optimization

RECOMMENDED STAKE

R$ 0.00

(0.00% of the Banking Sector)

Advantage (Edge)

0.00%

Mathematical expectation

Full Kelly (100%)

0.00%

Maximum theoretical reference

Fundamentals of Kelly Criterion

The **Kelly Criterion** is a capital allocation formula developed by physicist John Larry Kelly Jr. at Bell Labs in 1956. In financial and iGaming contexts, it determines the exact percentage of the bankroll to bet in order to maximize long-term portfolio growth.

The formula balances potential profit against the risk of ruin. If the estimated edge over the odds is high, the stake is adjusted proportionally. If the edge is zero or negative, the model sets the stake to zero.

Professional Recommendation: Most analysts use Kelly fractions (25% to 50%) to mitigate price volatility and protect their capital against sequences of negative variance.

Kelly Mathematical Formula

f* = [ p(b - 1) - q ] / (b - 1)

f* = Optimal portion of the bankroll to bet

b = Decimal odds offered by the bookmaker (Odd)

p = Estimated actual probability of victory (0 to 1)

q = Probability of defeat (1 - p)

Frequently Asked Questions (FAQ)

Full Kelly maximizes the theoretical growth curve, but requires absolute precision in estimated probabilities. If probability is overestimated, Full Kelly generates high volatility and exposes the bankroll to severe drawdown risk. Using fractional Kelly drastically reduces variance while preserving most of the yield.

When the formula results in a number less than or equal to zero, it means the event has a Negative Expected Value (EV-). In other words, the estimated probability multiplied by the odds offered does not justify the risk. In these scenarios, the mathematical guideline is not to place the bet (0%).

Full Kelly calculates 100% of the fraction obtained from the formula. Half Kelly divides this value by 2 (50%), while Fractional Kelly reduces it to 25%. The lower the chosen percentage, the more conservative the management and the lower the bankroll balance fluctuation.

Accurate estimates require historical statistical models, analysis of advanced metrics (xG, efficiency, head-to-head records), or comparison with odds without a margin listed by leading bookmakers (Pinnacle/Sharp Asian Bookmakers).