Kelly Criterion Calculator
Finding the edge is only half the trade. Size it wrong and good math still loses money. Enter your probability, the market price, and your bankroll — get the exact position size in seconds.
BANKROLL MANAGEMENT
The math behind "how much should I put on this?"
What is this?
Kelly is the formula that tells you the exact percentage of your bankroll to bet on a given market to grow your money as fast as possible without going broke. It was developed by a Bell Labs scientist and used by Warren Buffett.
Too little = you're leaving money on the table. Too much = one bad streak wipes you out. Kelly finds the sweet spot. Most sharp bettors use Half Kelly (half the suggested amount) for safety — this tool shows you both.
Real-World Example
→ Your Setup
You have $500 bankroll. You find a Kalshi market priced at 40¢ (40% implied) but you believe the true probability is 60%. Kelly says bet roughly 33% of bankroll = $165. Half Kelly = $82.50.
Most people would either bet $20 (too scared) or $300 (too reckless). Kelly gives you a mathematically optimal number with no emotion involved.
✅Action: Plug in your edge and bankroll. Use Half Kelly if you're new. Never exceed Full Kelly.
Bottom line: This is how professionals size positions. It prevents you from either under-betting or going bust.
Full guide →Your model's estimate — not the market price
Contract price (0.01–0.99) → payout 1.50:1
Total capital available for this trade
your edge
Position Sizing
Quarter Kelly is the sharp money standard. Full Kelly maximizes long-run growth but variance will shake you out before the math pays off.
Why Position Sizing Matters as Much as Finding the Edge
The Kelly Criterion was developed by John Kelly at Bell Labs in 1956 and has since become the foundational position-sizing framework for everyone from professional poker players to quantitative hedge funds. The core insight is simple but counterintuitive: overbetting a positive edge will destroy your bankroll faster than no edge at all. Variance compounds. Drawdowns at the wrong moment end the game before the expected value pays out.
On prediction markets like Kalshi and Polymarket, every contract is a binary bet resolving to $1.00. This makes the Kelly formula particularly clean to apply. If your model says an event has a 60% chance of occurring and the market is pricing it at $0.45, you have a 15-point edge. The Kelly formula tells you exactly what fraction of your bankroll to put to work — not based on confidence or gut feel, but on the mathematical relationship between your edge and your payout ratio.
Quarter Kelly is the professional standard. Full Kelly maximizes long-run geometric growth in theory, but your edge estimates are never perfect. A model that says 60% might actually be 56%. Quarter Kelly accounts for this estimation error — it captures the majority of the compounding benefit while reducing variance by 75%. Every serious prediction market trader, poker player, and quant fund running Kelly-based sizing uses a fraction, not the full formula.
This calculator auto-computes the payout ratio from your market price (no manual conversion needed), runs the EV check before showing you any sizing, and displays all four Kelly fractions so you can choose based on your conviction and risk tolerance. The edge is real when the math says it is — the calculator won't pretend otherwise.
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