Question 1

Why do American odds use both positive and negative numbers?

Accepted Answer

American odds are built around a baseline of $100, and the positive and negative signs are used to immediately distinguish the underdog from the favorite. The negative sign (-) indicates the favorite and tells you exactly how much money you must risk to win $100 in profit. The positive sign (+) indicates the underdog and tells you exactly how much profit you will win if you risk a $100 stake. This bifurcated system was designed to make unit-based accounting simple for American bettors, though it complicates the math required to calculate probabilities.

Question 2

Can implied probability ever exceed 100%?

Accepted Answer

For a single outcome, the implied probability can never exceed 100%, as 100% represents absolute certainty. However, when you calculate the implied probability of all possible outcomes in a single betting market (e.g., Team A winning and Team B winning) and add them together, the sum will always exceed 100%. This excess percentage (usually between 104% and 110%) is known as the overround, and it represents the bookmaker's built-in profit margin, or vigorish.

Question 3

Which odds format is mathematically superior?

Accepted Answer

While "superiority" depends on the user's geographical familiarity, Decimal odds are universally considered the most mathematically efficient and intuitive format. Decimal odds inherently include the return of the original stake, they are expressed as simple positive rational numbers, and they are incredibly easy to convert into implied probability (1 divided by the Decimal odds). Because of this mathematical elegance, Decimal odds are the standard for betting exchanges, quantitative algorithms, and professional syndicates worldwide.

Question 4

How do betting exchanges handle odds conversion?

Accepted Answer

Betting exchanges, which allow users to bet against each other rather than against a bookmaker, operate almost exclusively on a Decimal odds engine. Because exchange users propose their own odds and stakes, the system requires a highly granular, easily divisible format to match fractions of pennies across thousands of orders. While an exchange may offer a visual setting to display Fractional or American odds for the user's comfort, the underlying matching engine and all API data feeds process the mathematics purely in Decimal format.

Question 5

What are "No-Vig" odds and how do I find them?

Accepted Answer

"No-Vig" (No-Vigorish) odds are the true, fair-market odds of an event occurring, stripped of the bookmaker's profit margin. To find them, you must calculate the raw implied probability of all outcomes in a market, sum them to find the total overround (e.g., 105%), and then divide each individual raw probability by that total overround. This scales the total market probability back down to exactly 100%. Converting these adjusted percentages back into odds gives you the No-Vig odds, which reflect the market's true assessment of the event.

Question 6

Why do some fractional odds look backwards, like 1/3?

Accepted Answer

Fractional odds represent the ratio of profit (numerator) to stake (denominator). When the denominator is larger than the numerator, such as 1/3, it means the required stake is larger than the potential profit. This represents a heavy favorite, meaning you must risk 3 units just to win 1 unit of profit. In British betting terminology, this is referred to as being "odds on." Conversely, when the profit is larger than the stake (e.g., 3/1), it represents an underdog and is referred to as "odds against."

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