Are you looking to take the next step and start betting for profit rather than entertainment? Understanding concepts like edge and implied probability is a great place to start and crucial for making informed wagers. These basic terms help bettors assess the potential profitability of their bets and make strategic decisions. Understanding these concepts is the first step towards betting based on the numbers to find betting value in the market.
What is Implied Probability?
Implied probability is the conversion of betting odds into a percentage that reflects the likelihood of an event occurring, according to the sportsbook. In other words, Implied Probability refers to the likelihood of a particular outcome happening, as implied by the odds set by the sportsbook.
Lets use the DraftKings Odds for the matchup between Florida State and Georgia Tech Football on August 24, 2024 as an example:
Calculating Implied Probability from Decimal Odds:
Implied Probability=(1/Decimal Odds) * 100%
Calculating Implied Probability from American Odds:
This calculation depends on whether the American Odds are positive or negative
Negative American Odds:
Implied Probability= -1*(Odds) / -1*(Odds + 100) * 100%
Positive American Odds:
Implied Probability= 100 / (Odds + 100) * 100%
While these calculations are quite straightforward, there are also Implied Probability Calculators that you can easily take advantage of to do these calculations quickly for you.
Implied Win Probability
Implied win probability is a specific application of implied probability, focusing on the likelihood of a team or player winning a match or event. By comparing this figure with your own assessment, you can identify bets that offer value, where your perceived probability is higher than the implied win probability. This is a cornerstone of developing a sports betting edge.
What Does Edge Mean in Betting?
An "edge" in sports betting refers to the advantage a bettor has over the sportsbook. This advantage arises when the bettor's assessment of an event's probability differs from the odds offered by the bookmaker. Essentially, it's the gap between the true probability of an event and the bookmaker's implied probability. Having a betting edge is key to long-term profitability, as it indicates that a bettor has identified a discrepancy in the odds that can be exploited for gain.
How to Calculate Edge in Sports Betting
To calculate the edge in sports betting, you need to compare your perceived probability of an event with the implied probability derived from the sportsbook's odds. The formula is:
Edge=(Your Probability−Implied Probability)×100%
For instance, if you believe a team has a 60% chance of winning, but the bookmaker's odds suggest a 50% implied probability, your edge is 10%. This calculation helps determine whether a bet offers value and is worth placing.
In summary, mastering the concepts of edge and implied probability can significantly enhance a bettor's ability to make profitable decisions. By identifying discrepancies between your assessments and the bookmaker's odds, you can find value bets that offer a higher chance of success over the long term. To learn more about long term betting success, read more in our article about Positive Expected Value betting.
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