What is Implied Probability in Betting?
Definition: Implied probability is the chance of an outcome expressed by the odds. It converts a price into a percentage.
Formulas:
- Decimal odds: 1 / odds. Odds of 2.00 imply 50%.
- Positive American odds: 100 / (A + 100). +150 implies 40%.
- Negative American odds: |A| / (|A| + 100). -200 implies 66.7%.
Link to margin: when the implied probabilities of all outcomes in a market are added up, the total is above 100%. The excess is the bookmaker margin (overround). For example, two outcomes priced at 1.91 each add up to about 104.7%.
Why it matters: implied probability is used to compare prices across markets, check the margin built into a market and monitor how odds move before and during an event.
Back to Glossary
