Odds and Probabilities: Odds Formats and Implied Probability
There are three main odds representations used by most bookmakers and betting websites. Let’s run through some examples of Decimal odds, Fractional Odds and American Odds:
- Fractional Odds
- This odds format is used primarily in the United Kingdom & Republic of Ireland. Fractional odds quote the potential profit which can be made on a bet if it wins, relative to the stake.
- For example if $500 is bet at odds of 2/1 the potential profit is $1000 ($500 * 2) and the total returned is $1500 ($1000 plus the $500 stake).
- Decimal Odds
- Decimal betting odds reflect the potential return if a bet succeeds, relative to the stake placed.
- For example if £$ is bet at odds of 3.0 the total returned is $15 ($5 * 3)- and the potential profit is £10 ($5 * 3 minus the initial $5 stake).
- American Odds
- Positive American Odds: These odds reflect how much you win on a single $100 bet. For example, a positive American odds @ +110 would win $110 for a $100 wager.
- Negative American Odds: The odds indicate how much you must bet in order to make $100 profit. For example a wager on a team with American odds of -90 would win $100 on a $90 bet.
- Implied Probability
- Odds correlate to probability e.g a 2/1 bet is expected to win twice in every 3 attempts, hence the probability is 33.33%.