Monday, October 8, 2007

Bankroll vs Edge and Odds

For a positive expectation bet, you need an edge.
Edge is the amount you expect to win.

For a positive expectation bet, you need the odds.
Odds of 2 to 1 converts to 1/(2+1) fraction

Wagers of positive expectation have size limitations.
Bankroll must be a consideration for making a wager.

Kelly Formula relates 'bet to bankroll' as 'edge/odds'.
Edge/odds formula ignores the effect this wager has.

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