Positive Expected Value (EV) Betting is getting a lot of attention these days, and for good reason – it can be a lucrative strategy when implemented properly. The most popular form of Positive EV betting involves taking advantage of discrepancies between odds offered by “retail” or “square” bookmakers, and the true probability of a particular outcome occurring, as represented by the odds of “market makers” or “sharp sportsbooks.” But there is a major pitfall associated with positive EV betting – its singular focus on expected value without regard to a bettor’s risk of ruin.
EV is a measure of how much a bet is expected to return over the long run. For example, if a bet has an EV of +10%, that means that, on average over a large number of trials, the bettor can expect to make a 10% return on their investment. While EV is an important metric to consider, it’s not the only thing that matters when it comes to sports betting.
The risk of ruin is the likelihood that a bettor will lose all of their bankroll before they have a chance to realize the expected value of their bets. A good example of the risk of ruin is a bettor who spends their entire bankroll on Powerball tickets, when the prize pool has gotten so large that it’s plus EV. While they would be assured of profiting if they could buy a large number (think hundreds of millions) of tickets, few people actually have the bankroll to afford such an investment.
To avoid the risk of ruin, sports bettors should make sure to set realistic expectations for their bets and not put too much of their bankroll at risk. A good rule of thumb is to never risk more than 2% to 5% of your bankroll on a single bet. This will help ensure that you don’t lose all of your money in a single bad streak of luck. Additionally, it’s important to diversify your bets and not put all your eggs in one basket.
OddsShopper Premium assists in both of these areas. With xROI, you can find what percentage edge each bet has, while also factoring win percentage. These two factors assist in computing the osBet%, which is a metric used to help bankroll management.
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