Different Odds Formats & What They Mean
Considered a precondition for betting, odds and their different formats are crucial to understand in order to get a full grasp on what is the value you can expect to get from money invested in betting. Learning to read betting odds, convert them into a different format and ultimately use them to calculate you potential betting payouts is not a difficult task, but a required one.
Understanding the odds is extremely important and needs to be taken seriously. Novice bettors and beginners would often think of odds as the possibility of an outcome, but that is the most commonly made mistake in betting which can ultimately cost you dearly. When it comes to betting, odds are the amount a bookmaker is willing to pay out on the winning bet.
In order to be successful in betting, one needs to find the perfect balance between the odds given and the value involved. Generally speaking, high odds often mean a lower probability of an outcome, but the better payout. And in order to get the best odds, a bettor needs to understand and appreciate them.
Betting odds are presented in different formats, some of which can be quite strange and unfamiliar for some with most betting sites displaying all 3 of the odds. While decimal odds are preferred in continental Europe, fractional odds are used in the United Kingdom. The United States, on the other hand, have ‘money line odds’ which are an entirely different way to present the favourites and underdogs.
The three formats are most commonly used with all the bookmakers around and can be understood with utter ease.
If we are to determine the most popular betting odds format then decimal would definitely be the one. The reasons behind the popularity of this odds format is its simplicity.
Decimal odds – 1.45, 1.70, 2.75 etc. – are the simplest ones to understand and calculate since all you have to do is to multiply your stake by the odds so that you can see what the payout of the given bet would be.
It is actually the simplest math formula of Your Stake x Odds = Payout.
If you are about to place a bet on Liverpool against Manchester United at the odds of 2.30, your return on a £10 bet would be £23. You should remember that the total return is the amount which includes your initial stake, so in order to calculate the net profit on your bet, you simply remove the stake.
In this case, it would be £23 – £10 = £13
The same amount can be calculated on a different approach so use whichever works best for you: Net Profit = Stake x (Odds – 1)
And again, in the Liverpool bet it is £10 x (2.3 – 1) = £13
Another thing worth remembering about decimal odds is the breakeven odds which are 2.00. These odds will double your stake which means you win exactly the amount you invested. Decimal odds below the 2.00 mark are less than even money odds which mean that the potential return on your investment is lower than the stake.
Decimal odds are considered the most economical way to bet parlays since it calculates the true odds, giving you the most accurate odds to maximise the edge and offer you a fair leverage.
Unlike the decimal odds which are often referred to as the European odds, fractional odds are traditionally used in the United Kingdom and Ireland.
The fractional odds originate from horse racing betting and are one of the oldest forms of odds going all the way back to the sixteenth century. As the word itself explains, fractional odds are represented in fractions – 1/2, 6/4, 10/11 etc. – and are therefore extremely easy to calculate since they indicate the net payout you will earn in relation to the stake.
The main difference to the decimal odds is that fractional ones show the possible profit with the stake excluded. Odds of 2/1 – which reads ‘two to one’ – means that bettors can hope to earn £200 profit on a £100 stake. To put things into perspective, the 2/1 fractional odds would be equal to 3.00 decimal odds since there are £200 of profit and £100 of the stake to be won in total.
The less favourable odds, such as 1/2 – which reads ‘one to two’ – will have you earn a £50 profit on a £100 bet (1/2 is 1.50 in decimal odds).
Note that odds of 1/1 are known as Evens or Even Money which means you will earn the exact amount you stake.
The easiest way to convert fractional odds to decimal is to divide the fraction and add 1 – 1/2 + 1 = 1.50.
Commonly used in the United States, American Odds are also known as money line odds which offer different values for favourites and underdogs in an event. A negative figure will represent the amount you need to wager in order to earn £100, whereas the positive money line shows how much you can gain on a £100 bet.
If we take a baseball game as an example with team A given –190 and Team B +150, you will have to bet £190 on Team A to win £100, whereas a £100 on Team B would earn you £150.
American odds are indeed different, but they can be easily converted into decimals using two simple formulas – one for the negative money line and one for the positive.
Positive money line value: (Money Line Odds + 100) / 100 = Decimal Odds.
Negative money line value: (Money Line Odds + 100) Money Line Odds = Decimal Odds.
If you got confused with maths, fractions and formulas and are worried that you will have problems converting and understanding the odds, there is no reason to feel that way. Most of the top betting sites today have their odds presented in all the formats so until you learn to read them properly, just select the tool to change the odds and you will be good to go.