What are Fractional, Decimal and American odds?
One of the first concepts every bettor needs to understand is the different quoting conventions for odds. Odds not only dictate how much you can win on a bet, but they also reflect the implied probability of the event’s outcome. Let’s break down the three main types of odds: Fractional, Decimal, and American, where they are commonly used, how they relate to each other, and their connection to implied probability.
Fractional Odds
What Are They?
Fractional odds are predominantly used in the UK and Ireland. They are presented as a fraction, such as 5/1 (read as “five to one”), and they indicate the profit you stand to make on a bet relative to your stake.
How to Understand Them:
If you bet $1 at odds of 5/1, you would receive $5 in profit plus your original $1 stake back, for a total return of $6.
Implied Probability:
The implied probability can be calculated using the formula: Probability (%) = Stake / (Profit + Stake) x 100. For 5/1 odds, the calculation would be 1 / (5 + 1) x 100 = 16.67%.
Decimal Odds
What Are They?
Decimal odds are popular in Europe, Canada, and Australia. They quote the total amount paid out for a winning bet per unit staked, including your original bet.
How to Understand Them:
If the decimal odds are 6.00 and you place a $1 bet, you would get $6 back if you win, which includes your $1 stake. The profit would be $5.
Implied Probability:
The formula for calculating implied probability from decimal odds is: Probability (%) = 100 / Decimal Odds. So, for odds of 6.00, the implied probability is 100 / 6 = 16.67%.
American Odds
What Are They?
American odds, also known as money-line odds, are used in the United States. They are expressed as a number with a plus or minus sign. A positive number indicates how much profit you would make on a $100 bet, while a negative number shows how much you need to bet to make $100 in profit.
How to Understand Them:
If the odds are +500, a $100 bet would yield $500 in profit. If the odds are -500, you need to bet $500 to make a $100 profit.
Implied Probability:
For positive odds, the formula is: Probability (%) = 100 / (American Odds + 100) x 100. For negative odds, it’s: Probability (%) = American Odds / (American Odds – 100) x 100. So, +500 odds give an implied probability of 16.67%, similar to the examples above.
Converting Between Odds Types
Converting between the three types of odds can help bettors compare odds across different platforms. Here’s a quick guide:
- To convert fractional odds to decimal: Add 1 to the fraction and convert to decimal. For example, 5/1 becomes 6.00.
- To convert decimal odds to American: If the decimal odds are 2.00 or higher, subtract 1, multiply by 100. If below 2.00, divide -100 by the decimal odds minus 1. For example, 6.00 becomes +500.
- To convert American to fractional: For positive odds, divide by 100 and reduce the fraction. For negative odds, do the opposite. +500 becomes 5/1.
Understanding Implied Probability
Implied probability is a concept that allows bettors to understand the likelihood of an event occurring as implied by the odds. It’s crucial for assessing value in odds — if you believe the chance of an event happening is higher than what the odds suggest, you might have found a good bet.
In sum, whether you prefer fractional, decimal, or American odds, understanding these conventions is crucial for making informed betting decisions. At Smart Betting Tips, we’re here to help you navigate these complexities, turning knowledge into power and bets into winnings.