Kelly Criterion Calculator

Calculate optimal betting/investment ratio

The Kelly Criterion is a formula for calculating the optimal betting/investment ratio to maximize long-term wealth.

Formula: f* = (bp - q) / b
f* = Optimal investment ratio b = Odds (net return rate) p = Win probability q = Lose probability (1-p)
Probability of winning (0-100%)
Amount received on 100 bet if you win (e.g., 200 = 2.0 odds)
Enter your bankroll to see recommended bet amount
Kelly Ratio -
Recommended Bet -

Kelly Variants

Full Kelly (100%) -
Half Kelly (50%) -
Quarter Kelly (25%) -

Notes

  • Full Kelly: Mathematically optimal but high volatility
  • Half Kelly: Commonly used in practice, 75% less volatility
  • Negative result: Don't bet (negative expected value)
  • Kelly Criterion is only valid when probability and odds are accurate
About This Kelly Criterion Calculator

The Kelly Criterion is a mathematical formula for calculating the optimal fraction of capital to bet or invest. It maximizes long-term asset growth by balancing risk and reward.

What is the Kelly Criterion?

Developed by John Kelly in 1956, the formula calculates the optimal bet size relative to your capital: f* = (bp - q) / b (where b = odds, p = win probability, q = loss probability). It is mathematically proven to maximize long-term growth rate.

What is Half Kelly?

Half Kelly means investing only half of the amount suggested by the Kelly formula. It reduces volatility while still achieving good long-term performance, making it practical for real-world investing.

What are the limitations of the Kelly Criterion?

The formula requires accurate estimates of win probability and odds, which are difficult to determine in practice. Overconfidence in probability estimates can lead to significant losses. Use this tool for reference purposes only.

What is the Kelly Criterion?

Developed by John Kelly in 1956, the formula calculates the optimal bet size relative to your capital: f* = (bp - q) / b (where b = odds, p = win probability, q = loss probability). It is mathematically proven to maximize long-term growth rate.

What is Half Kelly?

Half Kelly means investing only half of the amount suggested by the Kelly formula. It reduces volatility while still achieving good long-term performance, making it practical for real-world investing.

What are the limitations of the Kelly Criterion?

The formula requires accurate estimates of win probability and odds, which are difficult to determine in practice. Overconfidence in probability estimates can lead to significant losses. Use this tool for reference purposes only.