## How Betting Odds Work

If you're new to placing bets, it’s important to learn exactly how betting odds work. Thankfully, it’s quite easy to understand and it is important for two key reasons.

**It helps you calculate the probability of an outcome happening.****It helps you calculate how much money you will make if your bet wins.**

**Calculating Probability From Betting Odds**

Whenever you see odds offered in fractions, i.e. 4 / 1, it’s quite simple to calculate the probability. To simplify the explanation, we’ll replace the numbers with letters to help you understand the simple formula. 4 / 1 turns into A / B.

Probability % = B / (A+B)

Let’s show you some examples:

- Probability of an outcome happening with odds of 4 / 1 is 20%
*as 1 / (4 + 1) = 0.20 = 20%* - Probability of an outcome happening with odds of 9 / 1 is 10%
*as 1 / (9 + 1) = 0.10 = 10%* - Probability of an outcome happening with odds of 1 / 4 is 80%
*as 4 / (1 + 4) = 0.80 = 80%*

That’s the hard part out the way, now let’s show you how to calculate your profit from betting odds!

**Using Betting Odds to Calculate Winnings**

Betting odds also indicate how much money you can win if the outcome does actually happen. Using the same example as before where 4 / 1 becomes A / B. For every amount of B you bet, you will win A amount.

Let’s run some examples:

- 9 / 1 - for every £1 you bet, you will win £9
- 4 / 1 - for every £1 you bet, you will win £4
- 1 / 4 - for every £4 you bet, you will win £1

**Fractional Vs Decimal Odds**Bookmakers promote odds in 2 forms, fractional and decimals. Most people actually find calculating winnings in decimals easier. You’re usually going to see decimals shown in betting exchanges, such as Betfair.

Here’s how we calculate winnings with decimals, it's really easy:

Winnings = (decimal odds x stake value) – stake value.

Let’s run some examples:

- Odds of 5.0 with £10 stake: (5.0 x £10) - £10 = £40 profit
- Odds of 9.0 with £20 stake: (9.0 x £20) - £20 = £160 profit
- Odds of 1.25 with £50 stake: (1.25 x £50) - £50 = £12.50 profit

**Converting Fractional Odds into Decimal Odds**As most people find it easier working with decimals, it can be useful to convert fractional odds into decimal odds. Here's how you do it:

Imagine your Fractional Odds as A / B.

Decimal Odds = (A / B) + 1

Let’s run some examples:

- 5 / 4 odds = 2.25 odds
*as (5 / 4) + 1 = 2.25* - 3 / 1 odds = 4.0 odds
*as (3 / 1) + 1 = 4* - 1 / 12 odds = 1.08 odds
*as (1 / 12) + 1 = 1.08*

**Next Steps**That’s all there is to understanding how betting odds work! Now you’re ready to place your first bet.

Found this free guide useful? Find even more useful betting tips and tricks in our free guides section and on our **YouTube channel**!

**Understand Matched Betting****What Does Liability Mean In Betting ExchangesWhat Is Hedging A Bet**

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