Kelly Criterion Calculator

How to Use This Calculator

1. Enter your win probability % (your estimated edge).
2. Enter the decimal odds (e.g. 2.0 for even money; sportsbook −110 ≈ 1.909).
3. Enter your bankroll.
4. See the Full Kelly and Half-Kelly bet sizes instantly.
5. Use Professional to apply an uncertainty reduction (Thorp recommends 50%) and see the maximum geometric growth rate.

Formula

Example

Frequently Asked Questions

• What is the Kelly Criterion? ▼
  The Kelly Criterion (Kelly 1956) gives the optimal fraction f* of your bankroll to bet to maximize long-run geometric growth: f* = (bp − q) / b, where b = decimal odds − 1, p = win probability, q = 1 − p.
• Why use Half-Kelly instead of Full Kelly? ▼
  Full Kelly maximizes long-run growth but leads to extremely high variance and large drawdowns. Half-Kelly achieves ~75% of the growth rate with roughly half the volatility. Most professional bettors and traders use 1/4 to 1/2 Kelly.
• How do I apply Kelly to stock investing? ▼
  Replace b with the expected gain/loss ratio: b = expected gain / expected loss. p = probability of a profitable trade. The Kelly formula gives the portfolio fraction to allocate. Apply fractional Kelly (50%) to account for model uncertainty.
• What happens if you over-bet the Kelly fraction? ▼
  Betting more than Kelly is mathematically proven to produce lower long-run growth than betting exactly Kelly. Betting 2× Kelly produces the same long-run growth as betting nothing (0% growth). Beyond 2× Kelly, you are guaranteed to eventually go bankrupt.
• What is the edge uncertainty adjustment? ▼
  In practice, your estimated edge (win probability) is uncertain. Edward Thorp and Claude Shannon recommended reducing the Kelly fraction by 50% to account for model/estimate uncertainty. This "uncertainty-adjusted Kelly" is safer than relying on a precise estimate.

Related Calculators