How to Read Decimal Odds and Calculate Returns
Odds are a price, and a price is a probability with a margin attached. Once you can convert between the two you can judge whether a bet is worth taking.
The formula
Return = stake x decimal odds. A ₹1,000 stake at 2.40 returns ₹2,400, of which ₹1,400 is profit. Nothing else needs to be memorised.
Implied probability
Divide 1 by the decimal odds. Odds of 1.60 imply 62.5 per cent. If you believe the true chance is lower than the implied number, the bet is poor value regardless of how likely it feels.
The overround
Add the implied probabilities of every outcome. Anything above 100 per cent is the market's margin. Tighter books mean better prices for you.
Back and lay prices
On an exchange the back and lay prices differ slightly. The gap between them is the real cost of trading a position in and out.
Frequently asked questions
Are decimal and Indian odds the same?
They express the same thing differently. Decimal odds include the stake in the return; Indian or fractional formats quote profit only.
What is a fair price?
A price whose implied probability matches your honest estimate of the outcome, before margin.
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