Kelly Criterion Calculator

What is the Kelly Criterion?

The Kelly Criterion is a mathematical formula that calculates the optimal bet size to maximize long-term bankroll growth. Developed by John Kelly at Bell Labs in 1956, it's used by professional gamblers, investors, and traders worldwide.

Kelly Criterion Formula

Why Use Half Kelly?

Full Kelly betting has extreme variance — even with an edge, you can experience 50%+ drawdowns. Half Kelly (betting 50% of the Kelly-recommended amount) reduces variance by 75% while only sacrificing 25% of the expected growth rate. Most professional bettors use half Kelly or less.

Kelly Criterion Example

You believe a +150 bet has a 45% chance of winning. The book implies 40% (1/2.50). Your edge is 5%. Kelly says bet 7.5% of your bankroll. With a $1,000 bankroll, that's $75 full Kelly, or $37.50 half Kelly.