Implied Probability, in plain words
Implied probability is the chance a price says a bet will win. It is the break-even rate: win more often than that and the bet makes money over time, win less and it loses. Every betting decision comes back to comparing that number with your own read.
For a plus price, divide 100 by the price plus 100: +150 is 100 / 250 = 40.00%. For a minus price, divide the price by the price plus 100, ignoring the sign: −200 is 200 / 300 = 66.67%. In decimal odds it is one divided by the odds.
Add up the implied probabilities of every side of one market and the total is more than 100%. The extra is the book's margin. So an implied probability is the book's number, margin included, not a fair chance. To get the fair chance, take the margin out first, which is what de-vigging does.
The idea, drawn
Worked example · illustration
+150 and −200
- +150
- 40.00%
- −200
- 66.67%
- +150 decimal
- 2.50
- −200 decimal
- 1.50
- +150: 100 / (150 + 100) = 40.00%.
- −200: 200 / (200 + 100) = 66.67%.
- Decimal check: 1 / 2.50 = 40.00% and 1 / 1.50 = 66.67%.
A +150 bet has to win more than 40% of the time to beat its price.