Betting Odds Explained, Know How Betting Odds Work
Matched betting is one of the finest ways to earn online money, in order to do matched betting one should always know how Odds really work. It is very vital to understand how to calculate Odds as a newcomer. If you don't have proper knowledge it can lead to a very costly mistake.
In this guide, I'll explain what betting odds are, how they work, and how we can use them at the time of matched betting. If you are a beginner, betting odds can look confusing at first but our complete guide will make sure you know everything so that you can make informed choices when betting online.
What are Betting Odds?
Betting Odds are nothing but some numbers compiled by the bookmakers to represent the probability of an outcome occurring. These odds also reveal how much they are willing to pay if you win a bet using those odds.
Betting odds are usually represented as either a fraction or as a decimal. Remember these odds are applied to each and every sport or event that bookmakers are taking bets on. It can be Football, Horse racing, Tennis, Basketball, Cricket, Golf, Hockey, TV Specials, or Politics.
Probability in Betting
These odds compiled by the bookmakers are always based on probability. In simple terms, Probability is the ability to predict the outcome of a certain event. If the probability is high it means it is more more likely to happen than not but if the probability is low it’s less likely to happen than not.
In a real-world situation, we use these betting odds to calculate probability in order to ensure the chance of winning a particular bet. Let's understand this with an example, if you toss a coin, there can be two possibilities, heads or tails. The probability of getting heads is a one in two chance and it is represented by 1/2 Odds which ultimately means the outcome has a 50% chance of winning.
If the favourable outcome is head (H).
Total number of possible outcomes = 2
Number of favourable outcomes = 1.
Therefore, P(getting a head)
P(H) = Number of favorable outcomes / total number of possible outcomes
How to Calculate probability from betting odds
Betting Odds are generally displayed as fractions or decimals and tell how much a bettor stands to win if his bet is successful. Whenever you see two numbers separated by a trailing slash, i.e. 2/1, this is known as fractional odds. While decimals odds are an alternative to seeing betting odds in the fraction format, and in our opinion, are easier to work out.
Fractional odds explained
Fractional odds will let you know how much you can win in relation to your stake. We can easily calculate probability in percentage from fractional odds. let’s replace the numbers with letters i.e. 2/1 becomes A/B. Here is the calculation: Probability (%) = B / (A+B).
Suppose you want to bet £10 on Arsenal to win against Chelsea at odds of 9/1, you will win £90. You will also get your £10.00 stake back, giving us total returns of £100.00.
Let's understand this with few more examples
9/1 can be calculated as 1 / (9 + 1) = 0.10 – There is a 10% chance that the event will happen
5/2 can be calculated as 2 / (5 + 2) = 0.28 – There is around a 28% chance that the event will happen
2/1 can be calculated as 1 / (2 + 1) = 0.33 – There is a 33% chance that the event will happen.
How to Calculate Winning using Fractional Odds
To calculate winnings on fractional odds, multiply your bet by the top number (numerator), then divide the result by the bottom (denominator)
Let us take a look at some examples.
- £10 bet at 5/2 odds is (10 * 5) / 2 = £25 (Profit)
- £10 bet at 2/5 odds is (10 * 2) / 5 = £4 (Profit)
- £10 bet at 6/4 odds is (10 * 6) / 4 = £15 (Profit)
Decimal odds explained
When converted into decimals, the potential winnings include the stake. As we have said earlier, Decimal odds are an alternative to seeing betting odds in the fraction format. They are far more common on exchanges. Leading Exchanges like Betfair and Smarkets always give you the option to view betting odds in this format.
How to Calculate Winning using Decimal Odds
In my opinion, if you are a beginner Decimal Odds are easier to work out. You just need to multiply your stake by the odds, to get your total returns. To know your winning you can use this calculation: winnings = (odds * stake) – stake.
- £10 bet at 9.0 odds can be calculated as (9.0 * £10 stake) - £10 stake = £80 (Profit)
- £20 bet at 2.5 odds can be calculated as (2.5 * £20 stake) - £20 stake = £30 (Profit)
- £10 bet at 4.0 odds can be calculated as (4.0 * £10 stake) - £10 stake = £30 (Profit)
How to Convert Fractional Odds to Decimal Odds
If you want to convert Fractional Odds to Decimal Odds you can simply do it by using a simple expression.
Suppose you have 4/1 as fractional Odds, let us assume it as A/B
Use this Calculation: Decimal Odds = (A/B) + 1
For 4/1 Fractional Odds, the Decimal Odds will be 4/1 +1 = 5.0
Fractional Odds or Decimal Odds which is better
Frankly speaking, both Fractional Odds or Decimal Odds are equally popular amongst the punters. If you are a beginner, decimal odds are a lot easier to understand. The fractional odds only represent winnings and do not include the returned stake compared to decimals which do include the stake.
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