HOW TO · PAPER PRACTICE

How to use Vig & Implied Probability Calculator

Learn what the sum of two quoted prices says—and what normalization cannot tell you.

Before you start

Use YES and NO quotes for the same binary question at the same time. ‘Vig’ here is arithmetic overround, not a verified platform fee.

Open Vig & Implied Probability Calculator

Step by step

  1. Enter 45 in YES price (¢) and 58 in NO price (¢).
  2. Read the automatically updated total and overround.
  3. Compare the normalized YES and NO percentages with the original quotes.
  4. Check the original market’s actual spread and fee information separately before drawing any conclusion about costs.

Worked example

45 + 58 = 103 cents: a 3 percentage-point overround. Normalizing gives 45 ÷ 103 ≈ 43.69% YES and 58 ÷ 103 ≈ 56.31% NO. This rescales the quotes; it does not discover objective probabilities.

What the result means

A total above 100 may reflect quotes, spreads, or timing. It is not necessarily revenue collected by a ‘house.’ A total below 100 does not prove an executable surplus.

If something goes wrong

Enter cents, not decimal prices: 45 rather than 0.45. If the two quotes come from different questions, start again with one question.

Check your understanding

Try 50 and 50, then 52 and 52. Explain why the normalized probabilities stay equal even though the total changes.