How to bet?

  • Whether to bet or not?
  • If betting, how much to stake?
  • Wager or bet an amount on one of the sides.
  • Get the payoff corresponding to our side.

Volatility/Variance

Though, the expected win-rate is the average of all wins. Over a small sample, the actual win rate will defer from our theoretical wins.

Which bets to make?

We know, we want to make bets with a positive payoff (aka expected outcome greater than wager). We will also understand, the need to spread these bets across a large sample size to be able to realise our expected win rate through the sample.

  • Rake or Vig (Fee charged by the house/bookie)
  • The payoff for taking the bet

How much to bet?

Post the decision to take a bet, the other question is how much to bet. How big or small?

Conclusion

In short, betting has 3 parts to it, whether to bet or not. If yes, how much can we bet optimally? And finally depending upon the risk management and win-rate deciding, capping the risk per each bet.

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