Prediction Market EV Calculator
Calculate Expected Value, optimal Kelly Criterion bet size, and breakeven probability for any Polymarket or prediction market trade.
Input Parameters
Implied odds: 2.00x
EV Analysis
Kelly Criterion Sizing
Understanding Expected Value in Prediction Markets
Expected Value (EV) is the most important concept in prediction market trading. It measures the average profit or loss you can expect per dollar invested over many trades. A positive EV trade means you have a mathematical edge over the market.
The EV Formula
For a binary prediction market contract:
Raw EV = (Your Probability × Implied Odds) − 1
Net EV = Raw EV − Fee Rate
Where: Implied Odds = 1 / Market Price
For example, if you believe an outcome has a 60% chance of happening, and the Polymarket price is $0.50 (implied odds 2.0x):
Raw EV = 0.60 × 2.0 − 1 = +20%
Net EV = 20% − 2% = +18%
Kelly Criterion for Position Sizing
The Kelly Criterion determines the optimal fraction of your bankroll to risk on a single trade. It maximizes long-term growth while managing risk:
Kelly % = (p × b − q) / b
Where:
p = your estimated probability of winning
q = 1 − p (probability of losing)
b = net odds received (implied odds − 1)
Most professional traders use "fractional Kelly" (typically 25-50% of the full Kelly recommendation) to reduce volatility and account for estimation errors in probability.
Breakeven Probability
The breakeven probability tells you the minimum win rate needed to break even at the current market price, accounting for fees:
If your probability estimate exceeds the breakeven probability, the trade has positive expected value.
Using This Calculator with Polymarket
- Find a Polymarket football market and note the current Ask price
- Estimate the true probability using our EV Scanner (which uses Pinnacle odds) or your own analysis
- Enter both values into the calculator above
- If Net EV is positive and Kelly% suggests a reasonable position size, you may have found a profitable opportunity