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  3. Kelly criterion
Betting glossary

Kelly criterion: what it means in betting

A formula for the share of a bankroll to stake on a bet with an edge; many bettors use a fraction of it.

Full Kelly = win probability − (1 − win probability) ÷ (decimal odds − 1). With no edge it is zero. It swings hard when the probability estimate is off, so fractional Kelly (half or quarter) is common. Educational, not betting advice.

ExampleA 55% win chance at -110 gives 5.5% of bankroll at full Kelly, 2.75% at half Kelly.
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