Kelly Criterion Calculator
Calculate the mathematically optimal bet size to maximize long-term bankroll growth.
Parameters
Full Kelly
10.00%
Bet: $100.00
Maximum growth, high variance
Half Kelly
5.00%
$50.00
Recommended
Quarter Kelly
2.50%
$25.00
Conservative
Key Metrics
The Kelly Criterion Formula
The Kelly Criterion calculates the fraction of your bankroll you should wager: f* = (bp - q) / b
Where b = decimal odds - 1 (net odds received on the bet), p = probability of winning, and q = probability of losing (1 - p).
The beauty of Kelly is that it balances aggression and caution mathematically. Bet too much, and a losing streak devastates your bankroll. Bet too little, and you leave growth on the table. Kelly finds the exact sweet spot.
FAQ
What is the Kelly Criterion?
The Kelly Criterion is a mathematical formula that calculates the optimal percentage of your bankroll to bet. It maximizes the long-term growth rate of your bankroll while accounting for both the probability of winning and the odds offered. The formula is: f* = (bp - q) / b, where b = net odds, p = win probability, q = loss probability.
Should I always bet the full Kelly amount?
Most professional bettors use fractional Kelly (half or quarter Kelly) because full Kelly is aggressive and can lead to large drawdowns. Half Kelly gives 75% of the growth rate with significantly reduced variance. Quarter Kelly is recommended for most people.
What happens if the Kelly Criterion gives a negative number?
A negative Kelly value means the bet has negative expected value, so you should not place it. The Kelly Criterion only recommends a bet when you have a mathematical edge.
Who invented the Kelly Criterion?
John L. Kelly Jr. developed the formula in 1956 while working at Bell Labs. Originally designed for information theory, it was adapted for gambling by mathematician Edward Thorp, who used it alongside card counting to beat casinos at blackjack.
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