Reading odds correctly is crucial to becoming a successful bettor. If you can’t read the odds of wager and understand what the odds represent, how can you place winning bets? The following guide will attempt to teach you how to read odds and use them to your advantage when placing bets.
Types Of Betting Odds
Simply put, betting odds indicate the potential profit you will receive if your bet is successful. Knowing how to read odds helps determine what your stake should be.
There are three main types of betting odds used by bookmakers:
- American Odds
- Fractional Odds
- Decimal Odds
Each odds type uses a different format to indicate the potential profits which can be won by wagering. Most sportsbooks allow bettors to toggle between the three odds types to pick the one they are most comfortable with.
American odds, also known as Moneyline odds, are the most popular odds type in the US. With American odds, users are provided with a number that represents the amount they would need to bet to win $100. It’s best that you know how to read odds in the American format first.
There are two different types of American odds: positive and negative. Negative or (-) odds are given to wagers short of even money. Positive or (+) odds are given to odds larger than even money. Thus, positive odds always indicate an underdog in a head-to-head matchup, whereas negative odds indicate a favorite.
American Odds Example
NBA Basketball Betting– NY Knicks vs LA Lakers
New York Knicks +150
If the New York Knicks are given +150 odds, betting $100 makes a profit of $150, should they win.
LA Lakers -150
On the other hand, -150 odds on the Lakers would mean you would need to bet $150 to get a profit of $100.
How to Convert American Odds to Probability
You may convert American odds into the probability the bookmaker has given of the event occurring with the following equations:
For (-) American odds: Probability = Odds / (Odds +100) * 100
Example – The Washington Redskins have -120 odds of winning a football game. The probability the bookmaker provides for this to occur (the Redskins winning) is:
Probability = 120/ (120 +100) *100
Probability = 54.5%
For (+) American odds: Probability = 100 / (Odds + 100) * 100
Example – The Chicago Bulls have +150 odds. The probability, in this case, would be:
Probability = 100 / (150 + 100)* 100
Probability = 40%
By calculating probability, you will be able to decide whether you think the bookmaker is giving you a good price on a bet or not. If you think a team/player is getting a lower probability than you should, place the bet.
Often referred to as European odds, decimal odds are the default odds type in Europe. As you’d expect, decimal odds display odds in a decimal number format. The number represents the amount to be returned for every $1 that you bet.
To calculate your profit from a bet, subtract your original stake from the total.
Profit = Total – Stake
Decimal Odds Example
Say you get 1.50 odds on a wager and bet $10. Then, your total winnings would be 1.50 X 10 = $15. To calculate the profit from the bet you must take the total winnings and subtract the stake (15 – 10) = $5.
Decimal odds are very easy to use. That said, remember that your total winnings are not your profit. Your original stake is taken into the calculation of your winnings. American and Fractional odds, on the other hand, both provide net profit instead of total winnings in their calculations.
2.0 is the break-even number for decimal odds. If a matchup provides odds that are greater than 2.0, that team/player is an underdog. If the odds are lower than 2.0, the team/player is a favorite.
Keep in mind, however, that bookmakers keep a commission on wagers. Bets with 1.90 odds might end up as break-even odds after their cut.
How to Convert Decimal Odds to Probability
Converting decimal odds to probability is extremely simple. You can just divide 1 by the decimal odds and then multiply by 100 for the percentage.
Example – The New York Rangers have 3.0 odds for a hockey game. In this case, the probability of the Rangers winning is:
Probability = 1/3 * 100
Probability = 33.3%
Generally thought of as British odds, fractional odds display betting odds as fractions. Originally used in horse racing, fractional odds are popular in the UK and Ireland.
With fractional odds, the amount you win for every dollar you bet is displayed in the form of a fraction. For example, 3/5 odds mean that for every $5 that you bet, you will receive a profit of $3.
Fractional Odds Example
Let’s say the New York Giants have odds of 2/1 to win a football game. That would mean that for every 1 dollar you bet you would receive $2 in profit. Thus, if you bet $10 on the Giants, you would receive $20 in profit for a total of $30.
Keep in mind that with fractional odds you calculate your profit, whereas decimal odds calculate your total winnings. Hence, 3.0 decimal odds is the same as 2/1 fractional odds.
How to Convert Fractional Odds to Probability
You can calculate the probability for fractional odds using the following equation:
Probability = Denominator / (Denominator + Numerator) * 100
Example – Let’s take a baseball game where the Toronto Blue Jays have 3/4 fractional odds. The probability the Blue Jays will win is:
Probability = 4/ (4 + 3) * 100
Probability = 57.1%
Converting Between Odds Types
If you would like to convert between odds types you may either use our odds converting calculator or do so manually. Odds calculators will automatically convert odds between American, fractional, and decimal.
Most sportsbooks allow you to toggle between odds types. This means the odds will be converted automatically by the site from any of the odds types to another. That’s why it’s a good idea to know how to read odds, regardless of the type.
If you would like to manually convert between odds types you need to first calculate the probability of a wager. You may then use the probability to recreate the odds in a different format.
Converting Odds Example
So, using American odds, say you calculate that the probability of a wager is 40%. In this case, the decimal odds would be:
Decimal Odds = 1/ Probability
How many different types of odds are there?
There are three types of odds used by the majority of sportsbooks: American (or Moneyline odds), Fractional (British odds), and Decimal (European odds). All three odds types present the probabilities and do not influence payouts. When betting, it’s best to know how to read odds in all three formats.
What is the probability of my wager winning?
The probability of a bet refers to the likelihood of the bet winning. Put another way, it is how likely a certain outcome is to happen. The probability is implied by odds and can be converted using specific formulas for each odds type.
Generally, it is calculated using decimal odds and dividing one by these odds. For example, if the New England Patriots have odds of 2.50 to win, the probability of them winning is 0.4 (40%).
How do I switch between odds types?
Most online sportsbooks have an option to toggle between the three types of odds: American (Moneyline), Fractional (British), and Decimal (European). The bar is generally found at the top or bottom of each page. Likewise, you can also use our Betting Odds Calculator to convert your odds.
What is the easiest odds type to use?
All odds types are straightforward but American odds are arguably the simplest. With American odds, you are provided with a number that represents the amount you need to bet to win $100. Beyond this, you get two different types of picks: the team favored to win, and the underdogs.
The favorites have negative odds, such as -150. This indicates that you need to bet $150 to win $100. Conversely, the underdogs have positive odds, e.g. +250. This shows that you need to bet $100 to win $250. While betting on the underdog has a lower chance of winning, the payouts are much higher due to this risk.