Odds are a numerical expression which is used to compare the chances of different outcomes arising from a given event. They are usually expressed as a ratio, with the first number representing the chances of success and the second number representing the chances of failure. For example, if a certain event has odds of 2:1, it means that there is a two-in-three chance of success and a one-in-three chance of failure.
Types of Odds
Odds can be expressed in several different formats, depending on the country or region. The two main types of odds are American Odds and Fractional Odds.
American Odds
American Odds, also known as Moneyline Odds, are the most popular format in the US and Canada. They are expressed as either a positive or negative number, depending on whether the outcome is perceived to be more likely (positive) or less likely (negative).
For example, if a team is expected to have a higher chance of winning, the odds might be expressed as +150. This means that a $100 bet would return $150 in winnings. Conversely, if a team is expected to have a lower chance of winning, the odds might be expressed as -150. This means that a $150 bet would be required to win $100.
Fractional Odds
Fractional Odds are the most popular format in the UK and Europe. They are expressed as a fraction, with the first number representing the potential winnings and the second number representing the stake.
For example, if a certain event has odds of 2/1, it means that a $1 bet would return $2 in winnings. Conversely, if a certain event has odds of 1/2, it means that a $2 bet would be required to win $1.
How Do You Add Odds Together?
When adding odds together, the approach you take depends on the format of the odds.
Adding American Odds
When adding American Odds together, the approach is relatively straightforward. All you need to do is add the numbers together and then convert the result into the appropriate format.
For example, if two teams have odds of +150 and +300, the total odds would be +450. This means that a $100 bet would return $450 in winnings.
Adding Fractional Odds
When adding Fractional Odds together, the approach is slightly more involved. The first step is to convert the fractions into decimals, which can then be added together. The result can then be converted back into the appropriate fractional format.
For example, if two teams have odds of 2/1 and 3/1, the total odds would be 5/1. This means that a $1 bet would return $5 in winnings.
Calculating Implied Probability
Implied probability is the probability that is implied by a given set of odds. It is calculated by dividing the first number of the odds by the sum of the two numbers.
For example, if a certain event has odds of 2/1, the implied probability would be 2 / (2 + 1) = 0.667, or 66.7%. This means that the event is perceived to have a two-in-three chance of success.
Calculating Payouts
The amount of money that you can win when betting on a certain event is determined by the odds and the stake. To calculate the potential payout, simply multiply the stake by the odds.
For example, if a certain event has odds of 2/1 and you place a $10 bet, the potential payout would be $20. This means that if you win, you would receive $30 in total (your stake of $10 plus your winnings of $20).
Calculating Expected Value
Expected value is the amount of money that you can expect to win (or lose) when betting on a certain event. It is calculated by multiplying the probability of success by the amount of money that can be won, and then subtracting the probability of failure multiplied by the amount of money that can be lost.
For example, if a certain event has odds of 2/1 and you place a $10 bet, the expected value would be (2/3 x $20) – (1/3 x $10) = $13.33. This means that, on average, you can expect to win $13.33 for every $10 that you bet.
Advantages and Disadvantages of Adding Odds Together
Adding odds together can be a useful tool for bettors, as it allows them to calculate the total potential payout, implied probability and expected value of a given bet. However, it is important to remember that this approach only works if you have an accurate estimation of the chances of success and failure.
Advantages
- Allows bettors to calculate the total potential payout, implied probability and expected value of a given bet.
- Provides a useful tool for comparing different betting opportunities.
- Allows bettors to calculate the implied probability of multiple outcomes.
Disadvantages
- Only works if you have an accurate estimation of the chances of success and failure.
- Can be difficult to accurately assess the chances of success and failure in certain situations.
- Not suitable for predicting the outcome of a single event.
Conclusion
Adding odds together can be a useful tool for bettors, as it allows them to calculate the total potential payout, implied probability and expected value of a given bet. However, it is important to remember that this approach only works if you have an accurate estimation of the chances of success and failure.