Betting Value
Understanding Implied Probability
Turn any betting line into a percentage and you'll know exactly what you need to believe to make a bet worthwhile.
By Jared Narz · · 2 min read
Implied probability is the win percentage a price suggests. It's the bridge between odds and your own opinion.
The formulas
- Positive odds:
implied % = 100 / (odds + 100) - Negative odds:
implied % = |odds| / (|odds| + 100) - Decimal odds:
implied % = 1 / decimal - Prediction market price: a contract at 41¢ implies about 41% (before fees)
Examples
| Odds | Implied probability |
|---|---|
| +144 | 100 / 244 = 40.98% |
| +100 | 100 / 200 = 50.00% |
| -110 | 110 / 210 = 52.38% |
| -200 | 200 / 300 = 66.67% |
It's also your break-even rate
If you only bet -110 lines, you need to win 52.38% of the time just to break even. That's why going 50% at -110 slowly loses money.
The vig is built in
Add up both sides of a market and you'll usually get more than 100%. Both sides at -110 add up to 104.76%. The extra is the book's margin. See Understanding Vig.
How to use it
Before you bet, ask: Do I believe this outcome happens more often than the implied probability? If the price implies 41% and you honestly think it's closer to 45%, the bet may have value. If you can't explain why, it probably doesn't. That question is the core of expected value.
Examples are illustrative and use hypothetical numbers. This article is educational content, not financial advice or a guarantee of results. 21+. Bet responsibly.