Implied Probability - The Ultimate Guide (2018 Update)
In this article we explain all you need to know about Implied Probability including exactly what it is, how to manually calculate it as well as a tool that will automatically do the math for you.
Assessing value when betting is fundamental to long term success. To recognise value, you need to understand the implied probability reflected by a given set of odds. So, what is implied probability?
What Is Implied Probability?
Implied Probability is used primarily for sports betting markets and turns traditional odds into a percentage. The odds of a particular bet correlate to the chance of it happening. However, it also takes into account the ‘house edge‘ and eliminates it to express the ‘true odds‘ of an event occurring.
Implied Probability Example
For example, a bet with odds of 3/1 (4.0) has an implied probability of 25%. This percentage means the bet is expected to win one in every four attempts.
If you believe that the bet should be winning one if every three attempts (which would imply odds of 2/1) then the odds of 3/1 represents value.
Furthermore, by backing more ‘value bets’, you also have a better chance of increasing your Return On Investment.
How To Manually Calculate Implied Probability
Before being able to manually calculate implied probability, you first need know about odds. If you’re confident on this subject, then great. If not, then we suggest you take a second to read this article on how betting odds work.
Right, so how do we manually calculate implied probability?
The calculation for implied probability is as follows:
- Implied Probability = Denominator / (Denominator + Numerator) * 100
For example, to calculate the implied probability for odds of 2/1, you would do the following maths:
- 1 ÷ (1 + 2) * 100 = 33.3%
Implied Probability Calculator
If you’re looking for a quick calculation, then our simple calculator is the perfect tool. Just enter the odds and the implied probability will automatically be calculated for you.
Alternatively, we’ve listed below some of the most popular odds along with their implied probability.
Working out the chance of a particular bet happening based on the odds is important and can help with your decision making of whether or not a particular bet offers value.
As a bettor, you want to look for odds that reflect a lower implied probability than that of your own personal assessment. By doing this, you will increase your chances of success and making long term profit.