Calculate your probability of winning W. rate of wealth. Although it may appear confusing, it’s actually pretty simple. 5 if you want to wager 50% of the stake recommended by the Kelly criterion). Since this is rarely the case in practice, Optimal-f is technically the correct calculation. Trading using the Kelly Criterion produces the fastest growth. R (win/loss ratio) is calculated as the average gain (4600) divided by the average loss (2950), resulting in. Using the results from your past trades calculate ‘W’, which is the probability of a trade ending as a. Unsurprisingly, the volatility or variance in the evolution of the bankroll is greatest for full-Kelly and least for eighth-Kelly. All that is required is to calculate the median of each portfolio using these returns and then find the portfolio with the largest median. The Kelly criterion or Kelly strategy is a formula used to determine position sizing to maximize profits while minimizing losses. 16 20:50 #3. The Kelly Criterion is a formula invented by J. 6 winning probability. This means if the Kelly Criterion advises a bet at 10% of your bankroll, if you’re using 1/2 Kelly it would be 5%, 1/4 2. if your max loss is 50%, optimal-f will be double kelly. The Kelly Criterion is the brilliant summation of a betting strategy first discovered by Information Theorist John Kelly. In the report, the entertainment giant revealed it will be launching ESPN Bet on Nov. Many well known investors use it, including Warren Buffett and Bill Gross. Odds The odds offered by the bookmaker or exchange. One simply produce a probability and severity gradient while the other is actually an adjusted KC that limits drawdown (but also limits optimized return profiling). 1 – 1. 00 returns a total of $300, including the proposed stake. p. Source Code：Real Time. The formula is as follows: Kelly Formula . 0. The Kelly bet size is found by maximizing the expected value of the. Information is provided 'as is' and solely for informational purposes, not for. If you can find an exploitable, repeatable edge, Kelly's system tells the maximum you should bet based upon. The Kelly bet size is found by maximizing the expected geometric growth rate. 0dwkhpdwlfdo ([shfwdwlrq lq )xwxuhv 7udglqj $ vxffhvvixo wudglqj vvwhp qhhgv wr kdyh d srvlwlyh 0dwkhpdwlfdo ([shfwdwlrq ru d vwdwlvwlfdo hgjh lq rughu iru lw wr kdyh d fkdqfh wr eh surilwdeoh lq wkh uhdo zruog ,w fdq ehNowadays, the Kelly Criterion has been implemented in many trading and investing strategies, to the point that even world-renowned investors such as Warren Buffet and Bill Gross reported to use the Kelly method in one of its many variations. The virtues of trading using the Kelly Criterion. It was found that the formula, which has a gambling background and helps to determine the optimal bet size, can also help with finding the ideal investment size. Wu and Chung [14] proposed a method for option trading to identify a profitable option portfolio by bidding the optimal fraction of the Kelly criterion. That is a probability of winning of 40%. The strategy is prevalent and is used as a revered staking plan among stock market investors and sports bettors to gain an edge. Gehm (1983) applied the Kelly criterion to the commodity market when trading futures and later on also Balsara (1992) used. Even supposing Kelly's formula was directly applicable to investing, it needs a long sequence of trades, with gains re-invested, to show its benefits. Edward O. * R = Historical Average Win/Loss ratio. The formula in D5 is where Kelly does the magic: =(D1*D3-1)/(D3-1) The result is the proportion of your bankroll recommended by the Kelly Criterion. The second is the total win loss ratio, which is made up of the total number of winning trades divided by the total number of losing trades. 3) / 3] = 0. These numbers are identical only in the “special case. 15 and laying the same outcome at 2. I have no problem. is used to guide an investor to take more risk when investments are winning and cut risk when investments returns is deteriorating. Ubzen 2012. Handbo ok of Asset and Liability Management, Volume 1, Edite d by S. 's formula described in "A New Interpretation of Information Rate" [1]. 1142/7598 Google Scholar; Markusson, O. PK. Winning Probability : Enter the probability of earning a profit from investment. The Kelly Criterion is a formula that produces the long-run optimal bet size, given the odds. It can seem counterintuitive in real time. Financial trading is an interesting research issue to many experts and scholars. Explore math with our beautiful, free online graphing calculator. This is because, as explained later, the Kelly Criterion doesn’t produce an “optimal fraction to bet,” but rather a leveraging factor. It. 25%. Very interesting nonetheless!The Kelly’s formula is : Kelly % = W – (1-W)/R where: Kelly % = percentage of capital to be put into a single trade. The trouble is that the financial market is a continuous flow and does not follow this model. The exact formula for optimal bet size based on the Kelly formula is: f* = (bp – q)/b. 6%) but your estimate of the true probability is 30%. 8% of your total bank roll. It suits long-term trading. It is widely applied to sports betting and casino gambling. This formula determines the optimal % of your account that you can bet to get the most profitable outcome in the long run. 09. Developed by a scientific researcher John Kelly Jr. The Kelly Criterion gives an optimal result for betting based on the probability of winning a bet and how much you receive for winning. Kelly Criterion มีที่มาอย่างไร ผมไม่ขอพูดถึงเยอะ เนื่องจากที่ผ่านมามีหลายบทความหรือเพจต่าง ๆ เขียนอธิบายไว้แล้ว แต่ผมจะขอสรุปสั้น. The Kelly criterion is a formula for sizing a bet or investment, aiming to maximize the expected geometric growth rate of wealth. Figure 9. 40. With 5 total trades and 3 profitable ones, W (winning probability) equals 3/5 or 0. If you can calculate the probability of winning on each bet or trade and the ratio of the average win to average loss, then the Kelly criterion will give you the optimal fraction to bet so that your long-term growth rate is maximized. Suppose you run a trading portfolio and you know your past trading historical performance. A simple approach to non-normal Kelly. whereKelly Criterion Calculator. What does KELLY CRITERION mean KELLY. Only then you can calculate geometric mean, which is a comparison value for comparing the profitability of your strategies. On 40. Put simply, the Kelly Criterion or Formula is a way to calculate how much of their assets a Forex trader should risk on any given trade in order to maximize the return. , -200 odds and shorter) because the Kelly Calculator struggles with “sure things. Kelly % = W/A – (1 – W)/B, where W is the win probability, B is the profit in the event of a win, and A is the potential loss. B – payout on the bet. 62. Section 1 Kelly Criterion Analysis. Kelly Criterion gambling is especially popular in sports betting and can potentially help you become a successful bettor. Use the Kelly Criterion to identify the mathematical optimum amount of capital which you should alloc. I can run backtest simulations to get a sense of historical "edge" and "odds". In this article, we will explore the Kelly Criterion in Forex trading and how it can be used to enhance your trading strategy. 40) / 1 = 0. The formula for the Kelly Criterion can be written as: Kelly% = W – [ (1-W) / R] Where: W = Winning probability factor (the probability that the result of the trade will be positive) R = Win/Loss Ratio (the total positive trade sums divided by the total negative trading sums)In plain English, the Kelly criterion says: Bet bigger when your edge is bigger and your chance of winning is higher, but bet less when your edge is smaller and your chance of winning is lower. According to a study Schaeffer's Senior Quantitative Analyst Rocky White conducted highlighting the 25 best S&P 500 Index (SPX) stocks in January going back 10 years, Chipotle Mexican Grill stock. I am always puzzled about the kelly or other methods. If a fully Kelly stake was 8%, then the half-, quarter- and eighth-Kelly stakes would be 4%, 2% and 1% respectively. 48. 8% stake really just means you are betting 7. 077 / 0. Apply the kelly formula and get the fraction that optimizes the. Because, yeah changing the bankroll is absolutely key. Written. A key thing that they miss, is that the log is only defined if. Or, regretted trading in a small quantity in a high-performing trade? In both cases, position sizing could have helped by: 1. * R = Historical Average Win/Loss ratio. If you check out Wikipedia or Investopedia, you’ll see formulas like this: f ∗ = p − 1 − p b − 1 f ∗ = p − 1 − p b − 1. As an example, the next image shows the progression of the equity curve with the same sequence of gains and losses, using 15% and 25% trade sizes in the mentioned coin-toss game. Kelly Criterion, works by looking a traders historical win/loss and gain/loss performance and optimizes the next trade risk basis on overall performance history. The formula is as follows: f = the fraction of the bankroll to bet. Now that you have W and R, you are ready to calculate Kelly percentage number: Kelly percentage number = 0. B – payout on the bet. e. Kelly can be murder during a bad losing streak, so sports bettors often reduce the Kelly. 14, marking the brand’s mobile debut in the United States. However, unlike in the previous situation we examined the Kelly Criterion for, there is not a nite number of outcomes of a bet on a security, so, we will use The Kelly Criterion is straightforward to calculate: you only need two inputs to determine the optimal betting size: The win/loss ratio – the win percentage of your trading strategy (R) (dividing the total gains of the winning trades by the total loss of the losing trades) The win ratio of the trading strategy (W) (the number of trades that. It is the probability of the anticipated wager winning. See full list on investopedia. Let’s calculate K for our scenario: Dutching Calculator - Know Your Stakes Quickly - Dutching Calculator tells you how much to stake on each selection to ensure an equal profit no matter which one wins, also known as the Dutching System. For example, if you have $10,000 in your trading. 980, in other words allocating 98% of your capital to a single position. The Kelly percentage is calculated using: The Win Ratio (W): This is the probability of a trade having positive returns. Calculate the Kelly Criterion. Since the variance in heads up will always be 1 than the formula is easily applicable to HU SNGs. Comes out to the same number. The Kelly criterion calculator is a powerful tool for managing your money when gambling or investing. Let XIt causes that the position size is hard to be estimated by the Kelly criterion. Preventing big losses 2. The Kelly Criterion is a formula invented by J. 5. Time: 20:00 Date: 2023-11-08. This simulation show us how, over a number n of bets, the optimal percentage of the total bankroll/portfolio to bet/invest is dictated by the Kelly Criterion, in this specific case 10. “The Las Vegas Grand Prix was the most bet F1 event. The Kelly bet size is found by maximizing the expected geometric growth rate. The Kelly Criterion is a formula used to bet a preset fraction of an account. Kelly % = trading capital to use in one trade. B – payout on the bet. 33). 1 Option Spread Trading Based on Kelly Criterion. Updated on April 13, 2020. Learn, create, implement and backtest various position sizing techniques such as Kelly, Optimal f, and volatility targeting on a trading strategy. Now lets calculate the FINAL PROFIT: 49,81,083. Well, say hello to Kelly’s Criterion! 14. Gamblers and traders alike should get to know the Kelly criterion intimately. The second point is that the trading strategy is difficult to determine the winning rate in the financial market and cannot be brought into the Kelly criterion to calculate the optimal fraction. Logically, the variability in the funds' evolution. Currently i risk 2% of capital. 5) ℓ = 2(p − 0. The formula takes. This episode will give an example for appl… Show Stock Market Options Trading, Ep Kelly Criterion For Position Sizing Credit Spreads -. The Expectancy Tool analyzes your historical trading results and determines your overall expected return in dollar per dollar at risk. My confusion is how to apply the Kelly formula once the system goes live and I am making trades based on the system signals. Vilhelm Gray over 3 years. 50/2). 2. If it hits my stoploss, i lose ~2k. Two simple components make up the Kelly Criterion, the first is the probability that a trade you make will return positive winnings – and the second is the win/loss ratio. The picture above has 2 simulations of betting at 20%, 50%, and 75% and 4 at the Kelly Criterion amount. Money management is one of the most important issues in financial trading. ℓ = 2 ( p − 0. Kelly Criterion, works by looking a traders historical win/loss and gain/loss performance and optimizes the next trade risk basis on overall performance history. To use the kelly criterion reasonably in trading you will need to follow these steps: Access at least one sample of one hundred trades you have executed. 11 hours. The Kelly Criterion is 6. The formula was adopted to gambling and stock market by Ed Thorp, et al. Imagine we have a trading system with a win rate of 65%. The literatures show the. Here is some sample code in Python using the backtrader library to implement the Kelly criterion on a strategy: import backtrader as bt. p = probability of winning (0. While Kelly Criterion is used to determine the optimal size of an investment based on probability and expected size of gain or loss, the Kalman Filter is used to estimate the value of unknown variables in a dynamic state where statistical noise and uncertainties make precise measurements impossible, and the Black-Scholes Model is used to. 62 Using this model you win nearly the same amount as kelly criterion. Some clarifications: I am writing software for a mechanical trading system. ell ℓ. Add the odds quoted by the. simplified(win_p, rr) simplified version of the kelly criterion formula. The Kelly criterion is a formula used in investing to calculate the optimal amount that should be allocated in future trades based on historical performance. So if your edge is 10% on a bet at even-odds, Kelly says to bet 10% of your bankroll; but for the same 10% edge on a bet at 10-1 odds, Kelly says to bet. (1923 – 1965) Developed the Kelly Criterion, a formula to proportion bets based on a disparity between given odds and true odds. W = Historical. After retiring from being a pharmacist, Verma decided to apply his statistical edge in sports betting to the markets. So, if trading monthly long options is your game, your optimum sizing is ~ 5 to 6 option trades per months each ~ 20% of your total risk capital. I'm sure many others will find. Risking 2% does not mean buying with 2% of capital. Adjust your posterior for information the market has. As demonstrated, the Kelly Criterion solves for one of the fundamental problems of investing and trading: position sizing. b = the decimal odds – 1. Position Sizing can make or break your trading results. The Kelly bet size is found by maximizing the expected geometric growth rate. The Kelly Criterion is comprised of two basic components. To calculate the “R,” divide the average. The continuous Kelly criterion states that for every i i th strategy with Sharpe ratio Si S i and standard deviation of returns σi σ i, you should be leveraged fi = mi/σ2i = Si/σi f i = m i / σ i 2 = S i / σ i. . I'm curious if anyone has. Zenios and W. The Kelly criterion is based on a trader’s history of at least 100 trades. But in most cases, to win on a trade we need. Even if using 20% of an ever decreasing account balance never blows out your account completely, this is not smart trading. For a single commodity, the most critical skill is the position sizing [12, 13], and for multiple commodities is the portfolio optimization [7, 11]. So am I correct in assuming the Kelly Criterion is: =0. The expected return from a winning outcome. Therefore you can calculate your edge as follows: Edge = (1+1) (47. CURRENT BALANCE: Insert your current betting balance BOOKMAKER ODDS: The odds you want to back YOUR ESTIMATE (%): Your estimated probability of the selection winning FRACTIONAL KELLY BETTING (FKB): Choose between 0. Take Profit (%): Stop Loss (%): Portfolio ($): CalculateThe Kelly Criterion is a formula to determine the proper size of a bet with known odds and a definite payout. It takes into account your win probability and the odds being offered by the sportsbook, and provides a recommendation for the optimal bet size based on your bankroll size. That's not so useful in trading, where the outcomes are continuous. Mathematical formulation ; Monte-Carlo simulation. Conclusion. Euan Sinclair has some great stuff on how we can modify KC in his latest book, positional options trading. If a fully Kelly stake was 8%, then the half-, quarter- and eighth-Kelly stakes would be 4%, 2% and 1% respectively. The purpose of the Kelly criterion in investing is to see how much money you should put into a single trade. This guide explains how the Kelly Criterion works and why it’s so good for sports betting. The Kelly formula is : Kelly % = W – (1-W)/R where: • Kelly % = percentage of capital to be put into a single trade. One should not commit more than 20% to 25% of the capital into single equity regardless of what the Kelly criterion says, since diversification itself is important and essential to avoid a large loss in the event a stock fails. Keywords: Kelly criterion Option trading Profitable gamble Optimal f 1 Introduction The Kelly criterion [1] can be regarded as an optimization process for wagering ratios. Equation 1 is our objective function. The Kelly Criterion bet calculator above comes pre-filled with the simplest example: a game of coin flipping stacked in your favor. To calculate the optimal bet size use Kelly's criterion. This is just common sense!The Formula for the Kelly Criterion Is. 67%. To associate your repository with the kelly-criterion topic, visit your repo's landing page and select "manage topics. went bankrupt doing arbitrage trading in Russian government bonds. 20. The result has been stellar, with over $1million in profits in just a few short years. Generally, the Kelly criterion is a formula that maximizes the expected value of the logarithm of wealth that is equivalent to maximizing the expected long-term growth rate. We hope this skill can be applied to any futures trading strategies by using option buy-side. We do this by maximizing the median outcome with respect to the size of our bet, ℓ. He gives lectures to various institutions including The World Bank, Carnegie Mellon, and billion-dollar hedge funds. Does apply kelly now give better results? If kelly value is say 44k. How to use the Kelly Criterion calculator for traders. Specifically, we’ll go over the Kelly Criterion with a concrete example in…. We explain how it works, and discuss its advantages and disadvantages. Kelly Criterion. but it's probably something I'm overthinking. To calculate the optimal bet size use Kelly's criterion. 5 09 : 01. Works quite well in many ways, but has serious limitations when used for trading. Calculator. Penn Entertainment‘s stock experienced a significant surge after the successful launch of ESPN Bet Sportsbook across 17 states in the United States on Nov. It was found that the formula, which has a gambling background and helps to determine the optimal bet size, can also help with finding the ideal investment size. This method allows for the bettor optimize their bet size, while limiting their exposure to ruin (i. trading. 75 in addition to your stake of $57. Kelly Percentage = W – [(1 – W) / R] W - Winning probability; R - Win/loss ratio; With your trading records, you can calculate your winning probability and win/loss ratio easily. The trade will based on the most profitable option portfolio. The Kelly Criterion. ) 2) Reward per Dollar Risked: Enter the amount of capital your strategy, on average, profits. with constant bets. Notice that, when the assets are not correlated, the optimal result is the same as for a single asset. Example of the optimal Kelly betting fraction, versus expected return of other fractional bets. Winning Probability : Enter the probability of earning a. If I run 60% pop50 strategy and place ten small trades (takes a lot of research. Daily returns are computed from the adjusted prices observed on daily basis from January 1, 2007 to December 31, 2018 (2,920. Make your sports betting experience easier with our Kelly Criterion calculator, learn about the Kelly Criterion and how much you should wager to maximise your profits! Get Our. K = p x B (1 – p) / B Where: f = fraction of wealth wagered or % of making the highest profit on investment or gambling. A much simpler derivation of the Kelly Criterion. ” Kelly MultiplierFollow these steps to determine your optimal bet stake using the Kelly Criterion:1. Kelly is a very aggressive investment strategy. " GitHub is where people build software. Thus, the Kelly Criterion is a natural candidate for position sizing. Thorp is famous for his blackjack paperback, Beat the Dealer, where he explores Kelly for gambling. , a researcher at Bell Labs, in 1956. MacLean LC Thorp EO Ziemba WT The Kelly capital growth investment criterion: Theory and practice 2011 Singapore World Scientific 10. Chopra and Ziemba (1993), reprinted in Section 2 of thisWhatever method you use it’s important to understand that the Kelly Criterion assumes you continue trading in the same way you have in the past. 1. In the book he details a method where you calculate each of the kelly %s independently and then normalize the %s back to 100% to create an allocation/portfolio. For a strategy with an equal stop loss and profit target (1-to-1 odds in gambling), and a 60% win rate, the Kelly criterion produces an optimal bet size of 20% of your account. More. When applied to real-world stock data, the correlation coefficient between the proposed KSI and log-returns based on the Kelly criterion was −57. 077 / 0. The thresholds and the Kelly criterion simultaneously constrain the trading system in order to increase the profits of the trade, which is in the final rounded rectangle. Kelly Criterion Calculator Excel. Kelly, who was a member of a research center at AT&T’s Bells Lab, New Jersey in 1956. Learn how to make high probability bets and make income at the link below"WELCOME20" to get $20 off your first month!Kelly Crite. Kelly, who was a member of a research center at AT&T’s Bells Lab, New Jersey in 1956. CryptoThe Kelly criterion in Blac kjack, Sports Betting and the Stock Marke t. 40. This r ≡ exp E log ( R) is sometimes called expected geometric growth rate. A Kelly Criterion sports betting calculator can be used to manage your sports betting bankroll and determine optimal bet sizing. Trading----2. Kelly Criteria and the Kelly Formula. Would be great The developers would have a great app if not for the bugs . Information wants to be free. Pricing. g. 124 2 = 5. The Kelly criterion, which was first introduced by John R. The Kelly criterion is a well-known strategy for sizing bets to maximize long-run expected log wealth. Your stake sizes will adjust as you are using the kelly criterion, so a 7. In this section, we propose an option trading model, which better fits the usage of the Kelly criterion. Big-time investors such as Warren Buffett and Bill Gross have recently revealed that they use a form of the Kelly Criterion in their investment process. How to develop a good trading strategy to achieve long-term stable profit is the dream of many people [14]. 14 powerful trading calculators | Trade Optimizer Tools for professional traders. Variable betting is a powerful tool used to win more and lose less with sports betting, or at least that’s the goal with methods like the Kelly strategy. 067 or 6. A Kelly Criterion sports betting calculator can be used to manage your sports betting bankroll and determine optimal bet sizing. This implies a reward/risk ratio of 0. Professional Sports Bettor, Professional Poker Player and Trademate Sports Co-founder, Jonas Gjelstad, explains what staking strategy he uses for his sports. The first of these is the probability of a positive outcome, or a winning trade. Money management strategy based on Kelly J. In the one asset two valued payo case, the optimal Kelly wager is the edge (expected return) divided by the odds. First, you decide what percentage you would like to bet. A no vig fair odds calculator is used to back out "fair" odds from a market. The Kelly bet size is found by maximizing the expected value of the logarithm of wealth, which is equivalent to maximizing the expected. This is because, as explained later, the Kelly Criterion doesn’t produce an “optimal fraction to bet,” but rather a leveraging factor. Figure Two: The. Originating from a 1956 paper by computer scientist John Kelly, often termed the "Fortunes Formula," this approach gained prominence through Edward Thorpe's adaptation to triumph in. The expected return from a winning outcome. The Kelly Criterion is a mathematical formula created by John L. And when comes to Kelly, I will admit, it is a continuous process for me, to get to that FINAL approach, which is reliably REPEATABLE. Method 1 Method 2 The calculation of the Kelly criterion includes two main factors: the probability of winning and the win-loss ratio of the trading strategy. Kelly Jr in 1956 that determines the optimal risk per trade for a trading. There are two key components to the formula for the Kelly criterion: the winning probability factor and the win/loss ratio. It is a position sizing approach that defines the percentage of capital to bet. Handicappers can choose from a huge range of tools. The Los Angeles-based creation of three UCLA roommates announced its first such. The trade calculator tells you how much your trade size should be based on your risk profile you specified to the left in the "Percent Bankroll used". Learning how to win at sports betting is even harder, but it doesn’t have to be. The Kelly Criterion is to bet a predetermined fraction of assets, and it can seem counterintuitive. Total net profit, profit. The Kelly formula is : Kelly % = W – (1-W)/R where: Kelly % = percentage of capital to be put into a single trade. There is a 60% chance of a winning a coin flip. The closer to 1 you get, the better. The left-hand side of the equation, f*, is the percentage of our total wealth that we should put at risk. 77 = $91. g. The Optimal F system of money management was devised by Ralph Vince, and he’s written several books about this and other money management issues. A win/loss ratio is self-explanatory, you can calculate it by dividing. It is a simple formula that calculates the proportion of your balance to wager on a particular gamble. at Bell Labs, is a strategy for the optimal sizing of bets in the repeated bets scenario in his seminal paper¹. Ultimately, the Kelly Criterion formula calculates the perceived edge you have. on applications of the Kelly criterion in this context, for a review see [2]. In his paper “The Kelly Criterion in Blackjack, Sports Betting, and the Stock Market”, author Ed Thorp derives the biased coin-toss model for even money in which the betting fraction f*=p-q, or the probability of winning minus that of losing, but in the situation of uneven money it’s f*=p/a-q/b. Parameters: win_p: float, probability of winning. 52 q=0. 0%. 5). Applying the formula to forex trading looks like this: Position size % = Winning trade % - ( (1- Winning trade %) / Risk-reward ratio )Usually, bettors applying the fractional Kelly criterion use half a Kelly, a quarter of a Kelly, or an eighth of a Kelly. Stock Trading tools and resources. May have to change the equation to get exactly like kellyBy the way, I took you through the formulas just so you could get a sense of how changes in rake or winning percentage alter your optimal plays, but you can and should use a Kelly Criterion calculator. For example, if the potential profit is 20% and the stop loss is. 4. Calculate the relationship between risk and return R. 3. . Wu and Chung (2018) designed an option trading strategy via Kelly criterion, which showed the feasibility and profitability in practical scenarios. This is where the Kelly formula comes into play: K = ( PxB – (1–P) ) / B. This money management system is. L. We consider Banca Intesa as the reference stock. The Kelly criterion is a well-known strategy for sizing bets to maximize long-run expected log wealth. Kelly's criterion where Example of the optimal Kelly betting fraction, versus expected return of other fractional bets. I want to calculate the Kelly bet for an event with more than. Refresh the page, check Medium ’s site status, or find something interesting to read. For example, a wager with a 60% chance of being successful has a 0. Losing the first bet and winning the second will lose $4 more. The resulting optimal bet for this type of game, as a fraction of wealth, is. 2 – Kelly’s Criterion. To follow up on that. com Make your sports betting experience easier with our Kelly Criterion calculator, learn about the Kelly Criterion and how much you should wager to maximise your profits! Get Our FREE Betting Calculator App Results The odds are in your favor, but read the following carefully: According to the Kelly criterion your optimal bet is about 5. With kelly.