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Kelly Bet Calculator

Calculates the Kelly Bet, used to determine the optimal size of a series of bets.

screenshot

p: The probability of success.
b: the net odds received on the wager ("b to 1")

Example 1

Calculate the Kelly Bet for a bet of even odds with a 0.55 probability of success.

Value Keystrokes Display Description
1 b 1.00 Stores the b value.
.55 p 0.55 Stores the p value.
  kb 0.10 Calculates the kb value.

Bet 0.10 of your bankroll

Example 2

A contestant on a game show just picked a card and won $5,000.

He has the option to pick from the remaining 5 cards.
2 of the cards are "lose everything".
The other 3 cards average $6,000 on top of the $5,000.

Should he risk the $5,000?

Value Keystrokes Display Description
6000/5000 b 1.20 Stores the b value.
3/5 p 0.60 Stores the p value.
  kb 0.27 Calculates kb.

So, the $5,000 would represent 0.27 of his "bankroll".

5000/.27 = $18,750. That is a pretty big bankroll.

The contestant I saw decided to keep his $5,000 since, like most of us, he didn't have an $18,750 "bankroll". So even though this wager had a positive expected value, $5,000 was too much for him to risk.

Reference:

Kelly criterion - Wikipedia