Edge question for kelly

[robzilla]

Sorry, the title should be Edge question about Kelly. Ive been up all night.


Lets say the Jays are playing the yankees.

When capping the game I figure out that the Yankees have a 56% chance of winning

is the edge, 56%, 12% or 6%?

[Justin7]

It depends on the odds.

If p = 0. 56 (chance of winning your bet,
x = odds (1.0 for even money)

You EV = px - (1-p)
at even money, this is 0.56 - 0.44 = 0.12, or 12%.

Your Kelly fraction = EV / x. At 1.0, this is 12%

You don't have a 12% edge in MLB.

[jtuck]

Have to know the odds before you can figure edge

[robzilla]

It depends on the odds.

If p = 0. 56 (chance of winning your bet,
x = odds (1.0 for even money)

You EV = px - (1-p)
at even money, this is 0.56 - 0.44 = 0.12, or 12%.

Your Kelly fraction = EV / x. At 1.0, this is 12%

You don't have a 12% edge in MLB.

So winning prob is 56%?

Cuz i noticed there is winning prob and edge.

[juuso]

So winning prob is 56%?

Cuz i noticed there is winning prob and edge.

yes, but you need to know the odds too, to determine if you have an edge in the play or not.

[robzilla]

okay what it the odds were +105 for the yankees in my example up there?

[Bet Shooter]

okay what it the odds were +105 for the yankees in my example up there?

Plug it into the Kelly calc and it will spit out your optimum wager.

[jtuck]

+105 odds when you have a 56% chance of the play hitting yields a bet of approximately 14.1% of your bankroll, which is obviously high. Thats another great thing about kelly, if you get a bet size that large you know you've messed up in your capping and need to go back and look the game again.

[durito]

your optimal bet size is 0

[jtuck]

your optimal bet size is 0

How so?

[reno cool]

take 56% x 2.05---which is what youll get back (orig bet +win) =114.8

your edge is +14.8

[reno cool]

+105 odds when you have a 56% chance of the play hitting yields a bet of approximately 14.1% of your bankroll, which is obviously high. Thats another great thing about kelly, if you get a bet size that large you know you've messed up in your capping and need to go back and look the game again.

I don't think Kelly has anything to say about this. A 14% edge is very large, and I wouldn't recommend betting14% of a serious bankroll. But you dont need Kelly to see this.

[donjuan]

I don't think Kelly has anything to say about this. A 14% edge is very large, and I wouldn't recommend betting14% of a serious bankroll. But you dont need Kelly to see this.

If the 14% edge at +105 exists and you don't have a problem with limits (which would be a common problem since that big of an edge would typically be on a prop bet), why not bet full Kelly?

[jtuck]

If the 14% edge at +105 exists and you don't have a problem with limits (which would be a common problem since that big of an edge would typically be on a prop bet), why not bet full Kelly?

You should if you are sure you have correctly capped the game, but finding a large edge is rare and usually tells me i've managed to miss a pitching change or key injury.

[donjuan]

Finding that large of an edge on a major market with high limits would be very rare, but you get huge edges on prop bets all the time. Now, sometimes the limits are low, but that is another story.