💰 Kelly Criterion Calculator

Calculate optimal bet sizes using the Kelly Criterion formula for bankroll growth

Optimal Bet Sizing
Bankroll Protection
Max Growth Strategy
Moneky tilt head

Kelly Criterion Calculator

Your total betting bankroll available

Betting Parameters

Your estimated chance of winning
The odds offered by the sportsbook

How Kelly Criterion Works

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Calculates Edge

Determines your advantage based on win probability vs odds

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Optimal Sizing

Finds the bet size that maximizes long-term growth

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Bankroll Protection

Prevents overbetting and protects against ruin

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Conservative Use

Use fractional Kelly for reduced volatility

The Kelly Formula

f = (bp - q) / b

f = Fraction of bankroll to bet
b = Net odds received (odds - 1)
p = Probability of winning
q = Probability of losing (1 - p)

Key Principle

The formula finds the bet size that maximizes the logarithm of wealth over time.

When to Use

Only when you have a genuine edge (win probability > implied probability).

Fractional Kelly

Many bettors use 25-50% of Kelly to reduce volatility while maintaining growth.

Risk Warning

Overestimating win probability can lead to overbetting and bankroll damage.

Kelly Criterion Deep Dive

The Kelly Criterion was developed by John Kelly Jr. at Bell Labs in 1956. It's a mathematical formula that determines the optimal bet size to maximize long-term wealth growth while minimizing the risk of ruin.

📈 Why Kelly Works

Maximizes Growth: Optimizes the logarithm of wealth over time
Prevents Ruin: Never suggests betting your entire bankroll
Scales Properly: Bet size adjusts with bankroll changes
Handles Variance: Accounts for both wins and losses

📊 Kelly in Practice

Example: NFL bet with 60% win probability at +150 odds
• Decimal Odds: 2.50 (net odds = 1.50)
• Kelly % = (1.50 × 0.60 - 0.40) ÷ 1.50 = 33.3%
• On $10,000 bankroll: Bet $3,333
• But most pros use 25-50% of Kelly for safety
⚠️ This assumes your 60% win probability estimate is accurate!

Fractional Kelly Strategy

✅ Why Use Fractional Kelly

  • Reduces volatility and drawdowns
  • Accounts for estimation errors
  • Provides smoother bankroll growth
  • Reduces psychological stress
  • Still maintains long-term edge

📊 Fraction Recommendations

Full Kelly (100%): Maximum growth, high risk
Half Kelly (50%): Good balance
Quarter Kelly (25%): Conservative choice
Eighth Kelly (12.5%): Very conservative

Pros and Cons of Kelly Criterion

✅ Pros

  • Mathematically optimal growth rate
  • Protects against bankroll ruin
  • Scales bets with bankroll size
  • Maximizes long-term wealth
  • Works across all betting markets

❌ Cons

  • Requires accurate probability estimates
  • Can suggest large bet sizes
  • High volatility with full Kelly
  • Overconfidence can lead to ruin
  • Difficult to estimate true edges

Frequently Asked Questions