What is Chance?
Outside of gambling, chance is more commonly referred to in percentage terms. If one tosses a coin then there is a 50% chance of it landing on heads and a 50% chance of tails. All possible outcomes in any event will add up to 100% .
If one rolls a 6 sided dice, there is a one in six chance of any one number coming up. This can be expressed 16.66% (six possibilities divided by 100%).
Understanding Odds
Odds are simply a reflection of the chance or probability of a certain outcome in an event. In any event, every outcome has a chance or likelihood of taking place. Odds are simply an interpretation of those chances. The bookmakers form odds or prices to reflect those chances.
Most online bookmakers give one the option of which type of odds one wants to use.
Decimal Odds Explained
Rather than using percentages, bookmakers use odds. Decimal odds are commonly used in Europe and also known as European odds.
To convert chances into decimal odds just take the chance as a % and divide into 100. i.e. 100 divided by the % Chance = odds
So if you think something has a 20% chance of winning then using our formula, we get 100/20 = 5
For example, if one wishes to place a bet on an event which has decimal odds of 5. If one wins, for every one pound one stakes one receives 5 pounds back. Stake £10 and one gte a return of£50. One can see that one's stake is included in the odds.
European odds multiplied by one's stake equals the payout. The odds show how many units the bookmaker pays out per unit staked.
Guide to Fractional Odds
The more traditional fractional odds are often used in the UK. Using the 20% chance example again, the factional odds are 4/1. Fractional odds are saying that for every 1 time you win then 4 times you will lose. Which is the same as saying you have a 20% chance of winning and an 80% chance of losing.
Say one wishes to place a bet on an event which has odds of 4/1. If one wins, for every pound one stakes one will win £4; and one will receive the one pound stake back, giving one a total return of 5. If one places a bet of £10 at 4/1, then one will win £40 and the £10 stake returned, giving a total return of £50.
UK odds multiplied with one's stake equals the winnings. The odds show how many units one wins in terms of winning per unit staked.
US Odds
If one wishs to bet on US Sports then one will also need to understand American odds. American odds are also known as lines or money line odds. If US Odds are indicated with a (+) sign then they show the amount one would win for a 100 stake. If there is a (-) sign then they show how much one needs to stake to win 100.
So if one is betting on an event which has decimal odds of 5, or fractional odds of 4/1, the US Odds would be +400. If one is betting at decimal odds of 1.5, or fractional odds of ½, then the US odds would be -200US odds can be divided into positive odds and negative odds.
Negative US odds show how big a stake is needed for a winning of 100 units. Positive odds show how big one's winnings are if one bets 100 units.