Kelly Criterion Calculator
Calculate the optimal bet size using the Kelly Criterion to maximize long-term growth while managing risk
What is the Kelly Criterion?
The Kelly Criterion is a mathematical formula developed by John L. Kelly Jr. in 1956 that determines the optimal bet size to maximize long-term growth of your bankroll. It's widely considered one of the most effective bankroll management strategies in sports betting and investing, helping you balance growth potential with risk management.
How the Kelly Criterion Works
The Kelly formula is: f = (bp - q) / b, where:
- f = fraction of bankroll to bet
- b = decimal odds - 1 (net odds received)
- p = probability of winning
- q = probability of losing (1 - p)
Benefits of Using Kelly Criterion
- Optimal Growth: Maximizes long-term bankroll growth while minimizing risk of ruin
- Risk Management: Automatically adjusts bet sizes based on edge and odds
- Mathematical Precision: Uses proven mathematical principles rather than guesswork
- Flexible Application: Works with Full Kelly, Half Kelly, or Quarter Kelly for different risk tolerances
Kelly Criterion Variations
Our calculator offers three Kelly variations to suit different risk preferences:
- Full Kelly: Uses the complete Kelly formula for maximum growth (higher risk)
- Half Kelly: Uses 50% of the Kelly recommendation (moderate risk)
- Quarter Kelly: Uses 25% of the Kelly recommendation (conservative approach)
For best results, first calculate the Expected Value of your bet, then use Kelly Criterion to determine the optimal stake size. You can also use our Odds Converter to work with different odds formats.
Important Considerations
The Kelly Criterion assumes you can accurately estimate the true probability of outcomes. Overestimating your edge can lead to over-betting and increased risk. Many professional bettors use fractional Kelly (Half or Quarter) to reduce volatility while still benefiting from the mathematical optimization. Always ensure you have sufficient bankroll and consider the psychological aspects of betting larger amounts.