Odds & Analytics
Implied Probability: Reading Any Price Like a Pro
Every price is a probability statement. Here is how to read American, decimal, and fractional odds for what they actually mean.
Direct Answer
Implied probability is the probability of an outcome that is mathematically encoded in a betting price. For American odds: negative odds use -X/(-X+100); positive odds use 100/(X+100). For decimal odds: 1/decimal. Implied probability includes the bookmaker's margin and therefore overstates the true probability slightly.
Key Takeaways
- 01Every price encodes a probability.
- 02Implied probability includes the vig and overstates true probability.
- 03Both sides of a market sum to more than 100% by the hold.
- 04De-vig by proportional normalization for cleaner comparisons.
Conversion formulas
American negative odds: implied = -odds / (-odds + 100). Example: -150 implies 60.0%.
American positive odds: implied = 100 / (odds + 100). Example: +200 implies 33.3%.
Decimal odds: implied = 1 / decimal. Example: 2.50 implies 40.0%.
Fractional odds: implied = denominator / (numerator + denominator). Example: 5/2 implies 28.6%.
Why both sides sum to more than 100%
A standard -110 / -110 market implies 52.38% on each side - 104.76% total. The 4.76% overround is the bookmaker's hold. To recover the market's true probability estimate, divide each side by the overround. -110 / -110 de-vigs to a true 50% / 50%.
Frequently asked questions
Is implied probability the same as true probability?+
No. Implied probability includes the bookmaker's margin and is therefore slightly inflated. De-vigging produces a closer estimate of the market's true probability estimate, but the market itself can still be wrong.
Which de-vig method is best?+
Proportional (simple normalization) is most common and works well for binary markets. More sophisticated methods (logit, power, Shin) address known biases in different sports - the difference is small in most cases.
This article is educational only. It is not wagering, financial, or legal advice. See our editorial policy.