# HOW TO BET USING THE KELLY CRITERION ###### Unlocking Betting Success

In the world of sports betting, finding an edge is crucial for long-term success. One such strategy that has gained popularity among bettors is the Kelly Criterion theory. Developed by John L. Kelly Jr. in the 1950s, this mathematical formula helps bettors determine the optimal amount of their bankroll to wager on a particular outcome.

By understanding and implementing the Kelly Criterion theory effectively, you can enhance your chances of profitable betting. In this article, we will explore the key concepts of the Kelly Criterion theory and provide practical examples to illustrate its application.

###### Understanding the Kelly Criterion Theory

The Kelly Criterion theory is based on the principle of maximizing expected value (EV) by appropriately sizing your bets. It takes into account the probability of winning and the odds offered by bookmakers to determine the optimal bet size. The formula is as follows:
f* = (bp – q) / b
Where:
f* = optimal fraction of your bankroll to bet
b = odds received on the bet
p = probability of winning
q = probability of losing (1 – p)

###### Calculating the Optimal Bet Size

To illustrate the application of the Kelly Criterion theory, let’s consider an example. Suppose you are presented with a betting opportunity where the odds offered are 2.50 (b = 2.50), and you believe the probability of winning is 60% (p = 0.60). Using the formula, we can calculate the optimal fraction of your bankroll to bet as follows:
f = (2.50 0.60 – 0.40) / 2.50
f* ≈ 0.40

In this example, the optimal bet size would be 40% of your bankroll.

###### Managing Risk: Full Kelly vs. Fractional Kelly

While the Kelly Criterion theory can maximize long-term growth, it is important to manage risk appropriately. Betting your entire bankroll based on the Kelly formula is known as Full Kelly. However, Full Kelly can be highly volatile, as it involves placing large bets that could potentially deplete your bankroll during losing streaks.

Alternatively, Fractional Kelly involves betting a portion of the calculated optimal fraction to reduce risk. For instance, betting half of the optimal fraction would be considered Half Kelly.