One reason many punters fail to succeed in betting is that they simply do not understand what betting odds represent. Grasping this elementary concept is crucial to posting long term betting profits.
What Are The Chances?
To first understand what betting odds are, we have to first understand the concept of chance.
A chance is the likelihood of a certain event happening. It is often expressed in percentages, also referred to as the probability.
Rolling The Dice
Rolling a die yields a probability of 1 out of 6 for each outcome. In other words, the chances of a die coming up on any number 1 through 6 are equal, that chance being 1 out of 6.
In percentages this means a 16.66% chance (or probability) of any of the six numbers to coming up.
How is this calculated?
Simply by dividing 100% by the 6 possible outcomes.
Odds are simply another way to express probabilities. Decimal odds for example are simply inverted probabilities, which is why it is so easy to calculate with them. Hence their popularity.
Instead of saying an outcome has a probability of X%, X is now translated into a number.
This is how it is done:
100% divided by the probability = The Decimal Odds.
For instance, if you expect the probability of Adelaide winning a match in the AFL to be 40%. the conversion to decimal odds would look like this:
100% / 40% = 2.50
Odds expressed in this way are known as decimal odds (or European odds). For every unit you bet on the outcome you receive a return of 2.50 should you win. Once you subtract the unit you invested, it leaves you with a profit of 1.50.
If you have a calculator, you might find a 1/x key somewhere, which is also the mathematical formula used here
Type in the decimal odds of your choosing.
Press the 1/x key and you will get the implied probability.
Press the 1/x key again and the probability will be converted back to decimal odds
Fractional odds are another way of expressing odds, a popular format in the UK.
To use the previous example of decimal odds 2.50, fractional odds would express the probability as 6/4 (or 3/2 or 1.5/1). In other words, you have to bet 1 to win 1.50 profit.
A common error is to assume that 2.50 decimal odds should be 2.5/1. This however is wrong. Fractional odds calculate your net profit rather than your total return of the bet, which is why the stake itself (which equals 1) is being factored in below the fractional line. Odds of 3/2 reads as 3 to 2, which means you have to bet 2 units to win 3 units.
Generally this way of representing odds is on the decline even in the UK, as it is easier to make complex calculations with decimal odds, especially when calculating the underlying probabilities.
Converting fractional odds to their decimal equivalent is easy. It's done simply by working out the fraction (for 6/4 you simply divide 6 by 4) and then adding one.
(6 divided by 4) + 1 = 2.50
Or if you like, add the numerator and the denominator together then divide by the denominator.
6 + 4 divided by 4 = 10 divided by 4 = 2.50
North American Odds
North American odds can be even more confusing than fractional odds.
Firstly, they are presented as either positive or negative. For example - 150 or + 150. Essentially, they show you how much you will have to stake in order to achieve a profit of $100 or how much profit you will have if you stake $100.
Negative odds will show you how much you will have to stake in order to achieve a profit of $100. For example, if a team is represented with odds of – 150, it means you will have to stake $150 to get a $100 profit.
Confusing? Yes it can be. Fortunately it's not difficult to convert North American odds to their decimal equivalent.
Let's say we have odds of -150. We simply divide 100 by 150 and add 1.
(100/150) + 1 = 1.67
As opposed to Negative North American Odds, Positive North American odds will show you how much profit you will have if you stake $100.
If a team is presented with odds + 150 you will have $150 profit for a stake of $100. Essentially North American odds of + 150 is equal to decimal odds of 2.50.
To make the conversion, you simply need to divide the odds by one hundred and add one for positive American odds to return the decimal odds equivalent.
e.g (+150/100) + 1 = 2.50
As we have seen, betting odds express a probability or chance of an outcome occurring. Something that is very helpful to understand, is what is referred to as the 'implied probability' that betting odds represent.
So how do we calculate the implied probability given the odds?
Simple. It is 100% divided by the decimal odds.
e.g 100% divided by 2.50 = 40%
Decimal odds are easily the most popular form of expressing betting odds. But you should always choose to work with whatever format makes the most sense to you.
An understanding of betting odds will lay the foundation for all of your betting. Remember that the odds reflect the chance or probability of an outcome occurring.
Once you grasp this concept, you're well on your way to successful betting.
Read more at bettingexpert Learn
The Keys To Successful Betting
Understanding Betting Markets