Kelly Criterion Calculator
Calculate optimal bet size using the Kelly Criterion for bankroll management
About this calculator
The Kelly Criterion Calculator helps investors and bettors determine the optimal percentage of their bankroll to wager on favorable opportunities. This mathematical formula, developed by John Kelly in 1956, maximizes long-term growth while minimizing the risk of ruin. By calculating the ideal bet size based on win probability and potential payouts, it prevents over-betting and helps preserve capital during losing streaks while maximizing returns on winning investments.
How to use
Enter your estimated win probability as a percentage, input the odds or potential payout ratio, and specify your current bankroll amount. The calculator will instantly compute the optimal bet size using the Kelly formula: f = (bp - q) / b, where f is the fraction to bet, b is the odds, p is win probability, and q is loss probability.
Frequently asked questions
What is the Kelly Criterion formula?
The Kelly Criterion formula is f = (bp - q) / b, where f is the optimal betting fraction, b represents the odds received, p is the probability of winning, and q is the probability of losing (1-p).
Should I always bet the full Kelly amount?
Many experts recommend betting a fraction (25-50%) of the Kelly amount to reduce volatility and account for estimation errors in probabilities and odds, known as fractional Kelly betting.
What happens if Kelly Criterion gives a negative result?
A negative Kelly result indicates the bet has negative expected value and should be avoided completely. Only place bets when the Kelly percentage is positive, meaning you have a mathematical edge.