Implied probability
The win chance hidden inside the odds: turn any price into a percentage and you see what the book thinks will happen.
Implied probability (probabilité implicite) is the odds translated into a percentage. It's the fastest way to see what the book thinks, and to compare it with what you think.
The formulas
- Decimal odds: 1 ÷ odds. 2,80 on Mise-o-jeu+ is 1 ÷ 2.80 = 35.7%.
- Plus American odds: 100 ÷ (odds + 100).
- Minus American odds: odds ÷ (odds + 100), ignoring the minus sign.
Example: Habs +180
The Canadiens are +180, their opponent is -220 (illustrative, not a pick).
- Habs: 100 ÷ 280 = 35.7%
- Opponent: 220 ÷ 320 = 68.8%
- Total: 104.5%. The extra 4.5% or so is the book's cut (see overround).
Strip the margin and the Habs come out at about 34.2% (35.7 ÷ 104.5).
So how do you use it?
If you honestly think the Habs win this one 40% of the time, +180 looks like value, since the price only needs 35.7%. If you think 30%, skip it. Being honest with yourself is the hard part.
Expected value check: 0.40 × 1.80 minus 0.60 × 1 = +0.12, so about 12 cents per dollar on average, if your 40% is right. Big if.