Value betting masterclass · Module 1: The foundations · Lesson 2 of 25 · About 6 min
Implied probability is the chance of an outcome that a price suggests. Every set of odds is really a percentage in disguise, and once you can turn odds into a percentage you can start judging whether a price is mean or generous.
This guide shows how to convert decimal, fractional and American odds, and explains why the percentages in a market always total more than 100%.
Read the transcript
Every price a bookmaker offers is really a percentage in disguise, and in the next minute I'll show you how to turn any odds into one. With decimal odds it's as simple as dividing one by the price, so one divided by two point five gives you zero point four, which is a forty per cent chance. Fractional odds take one extra step: you divide the right-hand number by the two numbers added together. Six to four becomes four divided by ten, which lands you on forty per cent again. It's worth knowing a few by heart. Evens is fifty per cent, two to one is about thirty-three, one to two is about sixty-seven, and four to one works out at twenty. Now try adding up every outcome in a single market, and you'll notice the total always comes to more than a hundred per cent. That extra slice is the bookmaker's margin, built quietly into every price. You can check any price in seconds with our free odds converter, and as always, please bet responsibly.
Key points
- Implied probability = 1 ÷ decimal odds, so 1.80 means 55.6%.
- For fractional odds a/b, work out a ÷ b + 1 first to get decimal odds.
- The percentages in a market add up to more than 100%, and the extra is the bookmaker’s margin.
- Odds tell you what the price assumes, not what will happen.
What implied probability means
Odds tell you how much comes back if a bet wins, but they also hide a second number: the chance the price assumes. That chance is the implied probability.
Think of a fair coin. It lands heads half the time, so its fair price is 2.00, or evens. Stake £10 and win, and you get £20 back, so over many flips you would get back exactly what you staked. 2.00 and 50% are the same thing written two different ways.
This matters because value betting is all about comparing two numbers: the chance the odds imply and your own honest estimate of the real chance. Our value betting guide explains how they fit together.
From decimal odds to a percentage
Decimal odds are the simplest: divide 1 by the odds, then multiply by 100 for a percentage.
Worked example
Liverpool are 1.80 to win at Brighton (prices for illustration only). 1 ÷ 1.80 = 0.556, so the implied probability is 55.6%.
A horse called Copper Lantern is 9.00. 1 ÷ 9.00 = 0.111, so the price suggests an 11.1% chance.
It works in reverse too, from a chance to a price. If you rate something at 20%, 1 ÷ 0.20 = 5.00, so 5.00 is the fair price for a 20% chance.
Fractional and American odds
Fractional odds such as 7/2 show your profit per unit staked, so they need one extra step: divide the first number by the second and add 1. 7/2 becomes 7 ÷ 2 + 1 = 4.50, and 1 ÷ 4.50 gives 22.2%.
Odds-on prices work in exactly the same way. 8/11 becomes 8 ÷ 11 + 1 = 1.73, and 1 ÷ 1.73 is about 57.9%.
American odds use a plus or minus sign. A plus price such as +250 shows the profit on a $100 stake, so the implied probability is 100 ÷ (250 + 100) = 28.6%. A minus price such as −150 shows what you must stake to win $100, so the sum is 150 ÷ (150 + 100) = 60%.
Conversion table
Here are some common prices with their implied probability, with decimals rounded to two places.
| Fractional | Decimal | American | Implied % |
|---|---|---|---|
| 1/4 | 1.25 | −400 | 80.0% |
| 1/2 | 1.50 | −200 | 66.7% |
| 4/6 | 1.67 | −150 | 60.0% |
| 10/11 | 1.91 | −110 | 52.4% |
| Evens | 2.00 | +100 | 50.0% |
| 6/4 | 2.50 | +150 | 40.0% |
| 2/1 | 3.00 | +200 | 33.3% |
| 5/2 | 3.50 | +250 | 28.6% |
| 3/1 | 4.00 | +300 | 25.0% |
| 4/1 | 5.00 | +400 | 20.0% |
| 5/1 | 6.00 | +500 | 16.7% |
| 10/1 | 11.00 | +1000 | 9.1% |
The calculator below converts any price between formats and shows its implied chance.
Odds converter
Why a market adds up to more than 100%
Add up the implied probability of every outcome in a market. If the prices were fair, the total would be exactly 100%, because one outcome has to happen. Bookmakers build in a margin, though, so the total always comes out higher.
Worked example
Tottenham v West Ham is priced at 1.95 home, 3.60 draw and 4.00 away.
- Home: 1 ÷ 1.95 = 51.3%
- Draw: 1 ÷ 3.60 = 27.8%
- Away: 1 ÷ 4.00 = 25.0%
The total is 104.1%. That extra 4.1% is the overround, the bookmaker’s built-in edge.
The overround makes each price a little shorter than the fair odds, so each outcome’s implied probability is slightly too high. To get a cleaner estimate, you remove the margin, and our guide to removing the margin to find a true price shows the steps. For how big margins tend to be across different markets, see bookmaker margin explained.
What implied probability can and can’t tell you
Odds show what the market assumes, not what will happen. A 55.6% chance still doesn’t come in more than four times in ten, so one result proves very little.
The market can be wrong, but it is often right. Prices from busy markets tend to be sharp because so much money and information shapes them, so if your own estimate is very different, check your reasoning before trusting it. Then compare your number with the odds using expected value to see whether the price has a positive edge on paper.
And remember that value betting is a way to judge prices, not a promise of profit.
Related guides
- Value betting explained
- Fair odds: removing the margin
- Expected value betting with worked examples
- Odds shopping
- Glossary of betting terms
For background on odds formats and the maths behind them, see the Wikipedia entry on odds.
Lesson 2 of 25 · The foundations
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