kelly criterion and laying

[aliando]

i think I've gotten the grasp of the kelly criterion (but please dont ask me to explain it yet!)

question is, how do i apply this to laying?



for example, I have these %'s
home to win/draw 48.21%
away to win/draw 51.79%

odds: h 1.95, d 3.23, a 3.69

how would i calculate whether/how much to lay home/away?



alternatively, how can i change these odds to fit a calculator such as http://www.valuechecker.co.uk/bet/stakes.php ?

[aliando]

*bump*

[ScottyXS]

TBH ali, I have never really used the kelly criterion.
I understand it, after a good while on wiki!!
what I didnt like was didnt it use what you, yourself rate the percentage probability of a success in that bet was??

and this is the key factor in it, making sure you got higher than these odds ensures profits, but where do these odds come from, oneself, the bookies??

[slapdash]

Originally Posted by aliando

i think I've gotten the grasp of the kelly criterion (but please dont ask me to explain it yet!)

question is, how do i apply this to laying?

If you interpret the answer correctly, then exactly the same formula works as for backing. This formula (in terms of percentage chance and decimal odds) is that the "correct" percentage of your bank to use is

(percentage chance) x (decimal odds) - 100%
---------------------------------------------
(decimal odds) -1

If the chance of either an away win or draw is 51.79%, so the chance of a home win is 48.21% and the odds available on a home win are 1.95, and used this formula to work out the "Kelly" amount to use to back the home team, you'd get

(48.21% x 1.95 - 100%)/0.95

which is about -6.3% of your betting bank.

Now of course the fact that this is negative just tells you that there is no value in backing the home team.

But you should just interpret "betting -6.3%" as "laying to lose 6.3%", and this gives you the "Kelly" amount for laying.

I suspect most online calculators will do something unhelpful like saying "no bet" if the number turns out to be negative, though.

[aliando]

thanks slapdash! makes sense and seems simple now its said like that!


scotty - i've rehashed a little system that i've been tweaking for a while and need to back test. basically looking for value...