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Market analysis

Margin calculator

Bookmakers build a margin into every price: a cost that sits in the odds whether you see it or not. This calculator takes the odds you enter, works out how large that margin is, and shows which probabilities the price would imply without it. The result is a mathematical breakdown of the prices you provide, not betting advice.
Calculators
Analysis, not advice. The calculators' output is a mathematical illustration for the course chapters, not a betting recommendation, stake suggestion or financial advice. Every decision is your own responsibility.

Margin

Margin and fair price

The bookmaker's margin (overround) built into the quoted odds, and the fair probabilities after removing it using the proportional devig method.

Enter every odds (decimal odds greater than 1).

Chapter 4: Margin and overroundChapter 3: Implied probability

The formula

margin = 1/odds1 + 1/oddsX + 1/odds2 - 1 (on a two-way market: 1/odds1 + 1/odds2 - 1). Fair probability with the proportional method: an outcome's 1/odds divided by the sum of all 1/odds values.

Worked example

A 1X2 market is priced 2.10 / 3.40 / 3.60. The implied probabilities are 1/2.10 = 47.6%, 1/3.40 = 29.4% and 1/3.60 = 27.8%. They sum to 104.8%, so the margin is 4.8%. The fair probability of the home win is 47.6 / 104.8 = 45.4%, giving fair odds of 1/0.454 = 2.20 instead of the quoted 2.10: the difference is the bookmaker's margin.

Reference ranges

The ranges we also use in our course: sharp bookmakers run 2-3% margins on main markets, recreational (soft) bookmakers typically 5-8%, and 8-12% is not unusual on side markets and in small leagues, while the total overround of the correct-score market often exceeds 20%. The long-run payout ratio is 100/overround: a 105.3% market returns 95.0% of the money staked over time.

Common misunderstanding

Odds are not a pure probability estimate: they mix the market's estimate with the bookmaker's margin, and only arithmetic separates the two. Another frequent mistake is treating the fair price as an exact number: margin removal is a method-dependent estimate, and the proportional method tends to overstate the fair chance of long-odds outcomes because of the favourite-longshot bias.

01

What is the bookmaker margin?

The mark-up built into the odds. The implied (1/odds) probabilities of all outcomes on a market always sum to more than 100%, and the excess is the bookmaker's built-in cost: on a market summing to 105%, the margin is 5%.

02

How do I calculate the margin?

Add up the 1/odds value of every outcome on the market and subtract 1. If both sides of a two-way market are 1.90, then 1/1.90 + 1/1.90 = 105.3%, so the margin is 5.3%.

03

What are fair odds?

The price that would remain after removing the margin, reflecting only the probability priced in. The simplest, proportional method divides every implied probability by their sum; even so, the fair price is an estimate and varies slightly by method.

04

Why does the margin differ between markets?

On high-volume, competitive markets (such as the 1X2 of top leagues) bookmakers run a small margin, typically around 5% or below. Side markets have less data and less competition, so the pricing uncertainty is covered by a wider margin of up to 8-12%.

05

Does a smaller margin mean I will win?

No. The margin is the built-in price of a bet: a smaller margin means a lower cost, but it neither promises profit nor reduces the uncertainty of the outcome. The calculator makes the price visible; it does not predict results.