How To Read The Betting Odds Ratio
Betting odds are one of the fundamental pillars of the sports betting industry. They allow us to evaluate any event occurring probability. They also tell us what our benefits will be if we hit a bet. Furthermore, betting odds represent the ratio between the money that is risked and the potential profit. In this sense, there are three main betting odds formats, and each of them expresses this same relationship in different ways.
The Decimal Odds Ratio
The decimal odds format indicates how much money we can win per every monetary unit we bet. Decimal odds allow you to know quickly what your gross earnings will be. You just have to multiply the stake by the decimal odds value. For example, if we bet $ 5 on Newcastle United's victory in any match and the odd are 1.95, our gross income would be $ 9.75. To calculate the net profit, you need to subtract the money wagered. In our example, the net profit would be $ 4.75.
The Fractional Odds Ratio
Fractional odds show the ratio between the net profit and the amount you stake. A 3/5 odds means that for every $ 5 wagered, there will get a $ 3 net profit. So, this is the general fractional odds' expression:
- Fractional Odds Format = Potential Net Profit / Bet Amount.
In this case, we also can calculate the net profit by multiplying the odds by the money wagered. Then, if a punter bets $ 5 in favor of Newcastle United at a 9/10 odds, his profit will be (5 x 9/10) = $ 4.5. It is interesting to know how to convert fractional odds into decimal ones. For that purpose, we'll use the following formula:
- Decimal Odds = (Potential Net Profit / Bet Amount) + 1
For example, a fractional odd of 1/4 equals a decimal odd of 1.25.
The American Odds Ratio
This odds format is mostly used in America. In this case, bookies express odds as whole numbers, positive or negative, such as -195, +250, and +140. Depending on if they have a positive (+) or negative (-) sign, American odds can express two things:
- The money you must wager to get $100 or,
- How much you will earn by betting $100.
In the first case, you would bet on the favorite team or player. In the second, you would bet on the underdog. You can bet a different amount than $100. Your earnings would be proportional to the bet amount. In each case, the net income is calculated as follows:
If the odds are favorable:
- Net Profit = Bet Amount X (Positive American Odds / 100)
If you bet $ 5 at odds +180, your net profit would be 5x (180/100) = $ 9. If the odds are negative:
- Net Profit = Bet Amount X (100 / Negative American Odds in Absolute Value)
If you bet $ 5 at odds of -125, your net profit would be 5 X (100/125) = $ 4. To convert the American odds to the decimal format, you must do the following calculation:
- Decimal Odds = (Positive American Odds / 100) + 1
- Decimal Odds = (100 / Negative American Odd in Absolute Value) + 1
Now, you've got the basis to bet through the most widely used odds formats and understand the betting odds ratios.
