HOW TO · PAPER PRACTICE

How to use Expected Value Calculator

Explore how a probability assumption changes a mathematical average across hypothetical repetitions.

Before you start

Use fictional points. This calculator takes price as a percentage, unlike the Kelly calculator’s decimal price.

Open Expected Value Calculator

Step by step

  1. Enter 60 in Your True Probability (%). Treat ‘true’ as your uncertain estimate, not a known fact.
  2. Enter 50 in Market YES Price (%) and 100 in Bet Size ($). For this exercise, the dollar field represents fictional points.
  3. Select Calculate EV. Compare the expected value with the separate possible outcomes.
  4. Repeat with your estimate at 50 and then 40. Keep the market price and fictional amount fixed.

Worked example

At a price of 0.50, 100 fictional points represent 200 hypothetical shares. A YES outcome returns 200 points, a net gain of 100; NO loses 100. At an assumed 60% chance, the average net result is 0.60 × 100 − 0.40 × 100 = 20 points, before costs.

What the result means

Positive EV follows from your inputs. It does not validate your estimate, predict one outcome, or account for every fee and execution constraint.

If something goes wrong

If the result seems 100 times too large or small, check percentages: enter 50 here, not 0.50. Correct any validation message and calculate again.

Check your understanding

Find the probability at which the example has zero EV. Explain why the answer changes when costs are included.