What is expected value in prediction markets?

Expected value (EV) is what a trade makes on average if you could repeat it many times. For a contract that pays $1, EV per contract is your probability of winning minus what you pay, including fees.

What is a positive EV trade?

One where your probability is higher than the all-in price. Buying at 40¢ with a 1.7¢ fee when you think the true chance is 50% has an EV of about +8.3¢ per contract.

What is the Kelly stake?

The Kelly criterion is the share of your bankroll that maximises long-run growth if your probability is right: (your probability − price) ÷ (1 − price). Because probability estimates are noisy, many traders bet a quarter or half of Kelly.

Where do I get the fee per contract?

Use the fee calculator: at 40¢ Kalshi charges about 1.68¢ per contract for takers, and Polymarket between 0 and 1.68¢ depending on the category.

Expected value (EV) calculator

Enter the contract price, your own probability that it wins, how much you want to spend and the fee. The calculator shows the expected profit, ROI, your edge over the market, the break-even probability and the Kelly stake.

Contract price

What you pay per contract

Your probability

Your estimate it resolves your way

Amount to spend

Before fees

Fee per contract

See the fee calculator

Expected value

$20.75

EV per contract

8.30¢

ROI

19.90%

Edge

8.30 pts

Contracts

250

All-in cost

$104.25

Break-even prob.

41.70%

Kelly stake

14.2% of bankroll

At 50% you expect to make $20.75 on average. Many traders stake a fraction of Kelly (a quarter or half) to cut variance.

The formula

For a binary contract that pays $1 if it wins, bought at price P with fee F per contract, and your win probability q:

EV per contract = q × $1 − (P + F) ROI = EV ÷ (P + F)

The trade breaks even when q equals the all-in price P + F. The full Kelly fraction of your bankroll is:

kelly = (q − (P + F)) ÷ (1 − (P + F))

Getting your probability

EV is only as good as your probability. A useful starting point is the no-vig price across venues: if Kalshi and Polymarket disagree, the cheaper venue may be offering positive EV against the other's fair price. Use the no-vig calculator to get it.

Frequently asked questions

What is expected value in prediction markets?: Expected value (EV) is what a trade makes on average if you could repeat it many times. For a contract that pays $1, EV per contract is your probability of winning minus what you pay, including fees.
What is a positive EV trade?: One where your probability is higher than the all-in price. Buying at 40¢ with a 1.7¢ fee when you think the true chance is 50% has an EV of about +8.3¢ per contract.
What is the Kelly stake?: The Kelly criterion is the share of your bankroll that maximises long-run growth if your probability is right: (your probability − price) ÷ (1 − price). Because probability estimates are noisy, many traders bet a quarter or half of Kelly.
Where do I get the fee per contract?: Use the fee calculator: at 40¢ Kalshi charges about 1.68¢ per contract for takers, and Polymarket between 0 and 1.68¢ depending on the category.

More trader calculators

Fee calculator

Kalshi vs Polymarket fees for any price and size, with all-in cost and break-even.

No-vig calculator

Strip the overround from a set of prices to get fair, vig-free probabilities.

Odds converter

Convert between cents, implied probability, American and decimal odds.

Calculations run in your browser and are estimates for education only, not financial advice. Venue fee schedules change; check the venue before you trade.