What Is Implied Probability?
Implied probability is the probability built into a bookmaker’s odds. It helps turn odds into percentages so you can compare the market’s view with your own analysis.
How to Calculate Implied Probability
The formula is simple:
| Odds | Implied probability |
|---|---|
| 2.00 | 50% |
| 1.50 | 66.67% |
| 3.00 | 33.33% |
| 5.00 | 20% |
| 10.00 | 10% |
Practical Example
If Liverpool are priced at 2.50, the implied probability is 40%. If your analysis says the real chance is closer to 50%, that price may contain value.
Connection With Value Bets
Implied probability does not tell you whether a bet is good by itself. It shows what the market is pricing. A value bet appears when your estimated probability is higher than the implied probability.
Read more in What is a Value Bet?.
Why It Is Not Perfect
Bookmakers add margin, so the implied probabilities across all outcomes often add up to more than 100%. That extra percentage is the bookmaker’s built-in edge.
Frequently Asked Questions
What is implied probability?
It is the probability represented by a bookmaker’s odds.
How do you calculate implied probability?
Divide 100 by the decimal odds.
Why do probabilities often add up to more than 100%?
Because bookmakers include a margin in their prices.
Is implied probability connected to value betting?
Yes. It is the basis for comparing market probability with your own estimate.