Expected Value Calculator: Find +EV Bets on Polymarket
April 13, 2026 · PolyMath Team · 9 min read
Most Polymarket traders ask the wrong first question. They ask "will this happen?" when they should be asking "is this bet profitable?" Those are two very different questions — and the answer to the second one is called expected value.
Expected value (EV) is the single most important mathematical concept in prediction market trading. Understanding it separates traders who systematically profit from those who occasionally get lucky. This guide walks you through what EV means, how to calculate it, and how to use it to find genuine edge on Polymarket.
What Is Expected Value?
Expected value is the probability-weighted average of all possible outcomes of a bet. In plain English: if you made this exact bet an infinite number of times, what would your average profit (or loss) be per dollar wagered?
A positive EV (+EV) bet means you expect to profit on average. A negative EV (-EV) bet means the market is taking money from you on average. Zero EV means you break even.
The key insight: you can lose a +EV bet and still have made the right decision. You can win a -EV bet and still have made a mistake. What matters is whether your expectation is positive — not whether any individual bet wins.
The EV Formula for Prediction Markets
For a binary Polymarket contract (YES/NO), the expected value formula is:
EV Formula
EV = (P_win × Profit_per_dollar) - (P_lose × Cost_per_dollar)
Where P_win + P_lose = 1 (probabilities must sum to 100%)
On Polymarket, if you buy YES at price p (expressed as a decimal, so 0.65 = 65¢):
- Your cost per share is p
- Your payout if YES resolves is $1.00
- Your profit per share if you win is 1 - p
- Your loss per share if NO resolves is p
Simplified for Polymarket YES bets
EV = (P_true × (1 - price)) - ((1 - P_true) × price)
EV = P_true - price
Where P_true is your estimated true probability
The simplified formula reveals the elegant core truth: your edge on a YES bet is simply your true probability minus the market price. If you think something has a 70% chance of happening and it's priced at 60¢, your EV is +10 cents per dollar — a 10% edge.
Worked Examples with Real Polymarket Scenarios
Example 1: The Fed Rate Decision
Suppose Polymarket has "Fed cuts rates in June" priced at 42¢ (42%). You've analyzed the economic data and believe the true probability is closer to 55%.
Your EV calculation:
P_true = 0.55 (your estimate)
Price = 0.42 (market price)
EV = 0.55 - 0.42 = +0.13
+13% edge. This is a strong +EV bet if your probability estimate is accurate.
Of course, "if your estimate is accurate" is doing a lot of work there. The quality of your EV analysis is only as good as the quality of your probability estimates. This is why calibration matters — and why we built the Calibration tool.
Example 2: The Negative EV Trap
Bitcoin is at $85,000. Polymarket has "BTC hits $100K by May 1" at 35¢. Seems cheap — just a 35% chance for a 3-month rally? But you assess the true probability at only 20%.
Your EV calculation:
P_true = 0.20
Price = 0.35
EV = 0.20 - 0.35 = -0.15
-15% edge. The market is overpricing this. Buying YES here destroys value on average.
Many traders would buy this intuitively — "only 35 cents for something that could pay $1!" But if your true probability is 20%, you're paying 35 cents for something worth 20 cents. That's a bad deal no matter how exciting the outcome sounds.
Positive EV vs. Negative EV — Why This Matters
Here's a counterintuitive truth that separates serious traders from recreational bettors:
You can lose 60% of your +EV bets and still be profitable in the long run.
What matters isn't your win rate. It's your edge per bet, multiplied by position size, multiplied by number of bets. EV is additive across bets.
Suppose you make 100 bets, each with +5% EV, each staking $100:
- Total staked: $10,000
- Expected profit: $10,000 × 5% = $500
- Your actual results will vary, but trend toward +$500 over time
Now do the same with 100 bets at -5% EV and you lose $500. The math is implacable. This is why casinos always win, why sports books profit, and why finding genuine +EV is the whole game.
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Using Our EV Calculator
Our EV Calculator lets you quickly compute expected value for any Polymarket position. Here's how to use it:
Step 1: Enter the market price
Find the current YES price on Polymarket (e.g., 0.58 for a market trading at 58¢).
Step 2: Enter your probability estimate
This is the hard part — your honest assessment of the true probability. Be rigorous here. Overconfident estimates produce fake +EV signals.
Step 3: Enter your stake
How many dollars are you considering betting? The calculator shows absolute expected profit.
Step 4: Read the result
Green = positive EV (bet if edge is substantial). Red = negative EV (pass or fade). The calculator also shows suggested Kelly fraction for position sizing.
EV + Kelly Criterion: The Complete System
EV tells you whether to bet. Kelly Criterion tells you how much to bet. Together, they form a complete, mathematically optimal trading system.
The workflow is simple:
- Find your edge: Use EV calculation to confirm the bet is +EV. No edge = no bet.
- Quantify your edge: How large is the EV? A +2% edge warrants a different position size than a +15% edge.
- Size with Kelly: Use our Kelly Calculator to determine what fraction of bankroll to deploy.
- Apply fractional Kelly: Most serious traders use half-Kelly or quarter-Kelly to account for estimation error in their probability assessments.
Read our full guide on Kelly Criterion Betting to understand how position sizing works alongside EV.
FAQ
What's a good expected value for a Polymarket bet?
Generally, you want to see at least +5% EV before entering a position. Lower EV bets exist in the noise of your probability estimation error. The higher the EV, the more confident you can be that your analysis is capturing real edge rather than measurement error.
Can I bet NO instead of YES?
Yes. Buying NO at price p is equivalent to betting YES at 1 - p. If a market is at 80¢ and you think the true probability is 65%, buying NO at 20¢ has EV of 35% - 20% = +15% (since your true probability of NO resolving is 35%).
How do I estimate the true probability?
This is the hardest part of the EV framework — and where genuine edge lives. Methods include: studying base rates, comparing across prediction market platforms, reading primary sources (Fed minutes, earnings calls, polls), and checking calibration data. Our Calibration tool helps you understand historical accuracy of prediction markets as a benchmark.
Does Polymarket charge fees that affect EV?
Yes — always factor in trading fees (typically 2% of winnings on Polymarket) when calculating net EV. A +3% gross EV bet becomes near break-even after fees. Our EV calculator includes a fee adjustment field for this reason.
Is +EV betting the same as value betting?
Yes — the terms are interchangeable. Value betting (a term from sports betting) and +EV betting (from prediction markets and poker) describe the same concept: finding bets where your expected return exceeds the cost.
Calculate Your Expected Value
Use our free EV calculator to instantly analyze any Polymarket position. Enter the market price, your probability estimate, and your stake to see your edge.
Open EV Calculator →Also try our Kelly Calculator and Arbitrage Scanner