Expected Value Calculator

Q: Why does Expected Value work?

It works because you are operating with a mathematical edge over the market. Just like smart investing, Expected Value puts the statistics in your favor.

Q: How do I find the true probability?

That is the hard part. You can use statistical models, compare with closing prices from major markets, or use your own analysis.

Q: Does EV+ guarantee immediate return?

No. Individual results vary. Positive returns tend to materialize in the "long run" over multiple operations.

Q: Do I need a large capital?

Conservative capital management is recommended, as value operations can have variance even when calculated correctly.

Identify opportunities with positive expected value (EV+)

Formula Explanation

A "Value Opportunity" occurs when the probability of an outcome is higher than what the market's odds suggest.

Expected Value (EV) Formula

Calculation:
Value = (Odds × True Probability%) - 1

If the result is greater than 0, there is Expected Value.

Example

Coin Toss Example

Imagine flipping a coin. The specific probability of "Heads" is 50%.

Odds Offered: 2.10
True Probability: 50% (0.50)

Value = (2.10 × 0.50) - 1

Value = 1.05 - 1 = 0.05 (or 5%)

Since 5% > 0, this is a mathematically favorable opportunity.

Frequently Asked Questions

Why does Expected Value work?

How do I find the true probability?

Does EV+ guarantee immediate return?

Do I need a large capital?