Expected value combines possible outcomes with their probabilities. It helps compare prices under a set of assumptions, but the answer is only as reliable as the probability estimate.
Last reviewed: 2026-08-10
The calculation
For decimal odds, multiply probability by the total payout, subtract the stake, and account for the losing probability. An equivalent EV factor is decimal odds multiplied by estimated probability.
Positive does not mean certain
An EV factor above 1 indicates theoretical positive value under the entered assumptions. A single outcome can still lose, and a small edge can disappear when probability error or fees are included.
Validate the probability
Track forecasts before events, score them out of sample, and compare predicted probability bands with observed outcomes. Avoid using the offered price as both the forecast and the comparison target.
Step-by-step workflow
- 1Convert the offered price to decimal odds.
- 2Enter an independently estimated probability.
- 3Multiply odds by probability for the EV factor.
- 4Stress-test the result with lower confidence assumptions.
Frequently asked questions
What EV factor is break-even?
An EV factor of 1.00 is break-even before fees, taxes, and other costs.
Can market odds be used as the probability estimate?
They can provide a baseline after margin removal, but using the same price for both sides of the comparison does not establish an independent edge.