Information AboutOdds |
| CATEGORIES ABOUT ODDS | |
| probability theory | |
| wagering | |
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In Probability Theory and Statistics the odds in favour of an Event or a Proposition are the quantity ''p'' / (1 − ''p'') , where ''p'' is the Probability of the event or proposition. In other words, an event with ''m'' to ''n'' odds would have probability ''m/(m + n)''. For example, if you chose a Random day of the week, then the odds that you would choose a Sunday would be 1/6, not 1/7. The Logarithm of the odds is the Logit of the probability. Odds have long been the standard way of representing probability used by Bookmaker s, though the method of presenting odds varies by location. Taking an event with a 1 in 5 probability of occurring (i.e. 0.2 or 20%), then the odds are 0.2 / (1 − 0.2) = 0.2 / 0.8 = 0.25. If you as 5.0 to include the returned stake, in Craps payout as 5 for 1, and in Moneyline Odds as +400 representing the gain from a 100 stake. By contrast, for an event with a 4 in 5 probability of occurring (i.e. 0.8 or 80%), then the odds are 0.8 / (1 − 0.8) = 4. If you bet 4 at fair odds and the event occurred, you would receive back 1 plus your original 4 stake. This would be presented in fractional odds of 4 to 1 ''on'' (written as 1 : 4 or 1/4), in decimal odds as 1.25 to include the returned stake, in craps as 5 for 4, and in moneyline odds as −400 representing the stake necessary to gain 100. The odds are a Ratio of probabilities; an Odds Ratio is a ratio of odds, that is, a ratio of ratios of probabilities. Odds-ratios are often used in analysis of Clinical Trial s. While they have useful mathematical properties, they can produce counter- Intuitive results: in the example above an 80% probability is four times the chance of a 20% probability but the odds are 16 times higher. GAMBLING ODDS VERSUS PROBABILITIES In gambling, the "odds" on display are not the chances that the event will occur, but are the amounts that the Bookmaker will pay. However, in a free market under perfect information, the odds of paying tend to drift to the true probability odds. Profiting in Gambling involves predicting the relationship of the true probabilities to the payout odds. If you can consistently make bets where the odds of paying out are better than (pay out more) the true odds of the event, then over time (in theory) you will come out ahead. The odds or amounts the bookmaker will pay are determined by the amounts bet on each of the respective possible events. They reflect the balance of wagers on either side of the event, and include the deduction of a bookmaker’s brokerage fee (“vig” or vigorish). EVEN ODDS The term "even odds" implies that the payout will be one-for-one. Assuming there is no bookmaker’s fee, this means that the actual probability of winning is 50%. The term “better than even odds” looks at it from the perspective of a gambler rather than a statistician. If the odds are 1:1, and you bet 10, you win a profit of 10. If the gamble was paying 4:1 and the event occurred, you would win a profit of 40. So, it is better than even from the gambler’s perspective because it pays out more than one-for-one. If an event is prohibitively favored to occur, then odds will be worse than even, and the bookmaker will pay out less than one-for-one. In popular parlance surrounding uncertain events, the expression "better than even" usually implies a better than (greater than) 50% chance of the event occurring, which is exactly the opposite of the meaning of the expression when used in a gaming context. SEE ALSO |
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