Kelly calculator
Short answer
Enter the contract price and your own probability estimate. Kelly fraction = (your probability − market price) ÷ (1 − market price). Trade a quarter to a half of the result unless your estimate is unusually well grounded.
Edge
13.0%
Full Kelly
23.6% · $236.36
Half Kelly
11.8% · $118.18
Quarter Kelly
5.9% · $59.09
Found an edge? Check the live book and wallet flow before you size in.
How to use it properly
The calculator is arithmetic; the hard part is the probability input. A number pulled from a gut feeling produces a confident-looking stake built on nothing. Ground the estimate in something: base rates, a model, or observed flow from wallets with a real hit rate.
- Price 45¢ means the market thinks the event has a 45% chance.
- If you genuinely believe 58%, your edge is 13 percentage points.
- Full Kelly then sizes about 23.6% of bankroll — aggressive for a single contract.
- Quarter Kelly at ~5.9% is the size most experienced traders would actually take.
Why fractional Kelly
Kelly is optimal only if your probability is correct. Overestimate your edge by a few points and full Kelly can quietly turn into a losing strategy through variance. Half Kelly captures roughly three quarters of the growth with about half the volatility — a trade most people should take.
FAQ
+ What is the Kelly criterion in prediction markets?
Kelly gives the stake fraction that maximises long-run growth of a bankroll. For a binary contract priced at p cents with your estimated true probability q, the fraction is (q - p) / (1 - p).
+ Should I bet full Kelly?
Almost never. Full Kelly assumes your probability estimate is exact. Since it rarely is, most professionals size at a quarter to a half of Kelly, which keeps most of the growth with far less drawdown.
+ What if Kelly comes out negative?
A negative fraction means the market price is above your estimate — there is no edge on that side. Either pass, or consider the opposite side of the contract.