Kelly Criterion Calculator

How the Kelly stake is calculated

For a binary contract bought at price p with your estimated probability q, the Kelly fraction of your bankroll is (q − p) ÷ (1 − p). If q is not greater than p you have no edge, and Kelly says stake nothing. The calculator multiplies that fraction by your chosen fraction (full, half or quarter) and your bankroll to get a dollar stake, then converts it to contracts at the price you entered.

Why use half or quarter Kelly?

Full Kelly is mathematically optimal only if your probability estimate is exactly right — and it never is. It is also highly volatile, with large swings most people cannot stomach. Half Kelly captures most of the long-run growth with far less risk, which is why it is the most popular choice. For the full reasoning, see our guide to position sizing and the Kelly criterion, and keep every stake within sensible bankroll limits.

To turn a price into a probability first, use the odds converter; to check the payoff on a win, use the profit calculator; and to confirm the trade is worth making at all, the expected value calculator.

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Frequently asked questions

What is the Kelly criterion?

It is a formula for how much of your bankroll to stake based on your edge. For a contract at price p with your estimated probability q, the Kelly fraction is (q - p) / (1 - p). The bigger your edge, the larger the stake — but always a fraction of your bankroll, never all of it.

Should I use full Kelly?

Most traders do not. Full Kelly is optimal only if your probability estimate is exactly right and is very volatile. Half or quarter Kelly captures most of the long-run growth with far less risk, which is why this calculator defaults to half.

What if the calculator says 'no edge'?

If your estimated probability is not higher than the price, Kelly says stake nothing — there is no mathematical edge to size. The disciplined response is to pass on the trade.