General Betting
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a bag has 3 balls of different colurs, one green, one blue and one orange.
I'm offered odds of 4/1 to pick out the orange ball. Obviously the true odds are 2/1. How do I express my edge mathematically?
Is it (q-p)/q*100, where q=true odds as percentage, p=odds taken as percentage?
(33-20)/33*100= 40% edge? So every £1 invested should return 1.40
I'm offered odds of 4/1 to pick out the orange ball. Obviously the true odds are 2/1. How do I express my edge mathematically?
Is it (q-p)/q*100, where q=true odds as percentage, p=odds taken as percentage?
(33-20)/33*100= 40% edge? So every £1 invested should return 1.40
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Every £1 invested returns £1.67, so ROI (for me the same as edge) is 66.67%.
Imagine 3 goes, staking £1 each time. Probabilistically, you will win once.
Total stake = £3
Returns = £5
Profit = £2
ROI = Profit/stake = 2/3
Imagine 3 goes, staking £1 each time. Probabilistically, you will win once.
Total stake = £3
Returns = £5
Profit = £2
ROI = Profit/stake = 2/3
Edge is your change in EV. (expected value).
Expected Value is Sum of Probability*Profit over each outcome. At 4/1 you win 4 pounds 1 in 3 times and lose 1 pound 2 in 3.
So, your EV is 4*(1/3) - 1*(2/3)=2/3 = 66.7% edge.
Probability(Win)*Profit - Probability(Loss)*Stake.
Or if you prefer, you can do Probability(Win)*Return - Stake.
Expected Value is Sum of Probability*Profit over each outcome. At 4/1 you win 4 pounds 1 in 3 times and lose 1 pound 2 in 3.
So, your EV is 4*(1/3) - 1*(2/3)=2/3 = 66.7% edge.
Probability(Win)*Profit - Probability(Loss)*Stake.
Or if you prefer, you can do Probability(Win)*Return - Stake.
Let F=fair odds
Let P=payoff odds
House advantage
F-P/[1+F]
Punter advantage
P-F/[1+F]
So in your example
4-2/[1+2]=2/3=67%
Let P=payoff odds
House advantage
F-P/[1+F]
Punter advantage
P-F/[1+F]
So in your example
4-2/[1+2]=2/3=67%
one more answer can't hurt.
To put it in your language:
(q-p/p)*100
=(0.13/0.2)*100 = 67%
you just got the choice of divisor wrong
To put it in your language:
(q-p/p)*100
=(0.13/0.2)*100 = 67%
you just got the choice of divisor wrong
thanks all - knew i was wrong but couldn't see wood from trees..
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