You cannot tell whether a price is good without something to compare it to. The usual answer is your own opinion, which is hard to check. The better answer is the market's own estimate — but the posted prices include the bookmaker's margin, so they overstate every chance. No-vig fair odds is what you get after taking that margin back out.
The calculation
Start with a two-way market at $1.90 and $2.00. Convert each to implied probability:
- 1 ÷ 1.90 = 0.5263
- 1 ÷ 2.00 = 0.5000
- Total = 1.0263 — the extra 2.63% is the margin
Now divide each probability by that total, which scales them back so they sum to exactly 1:
- 0.5263 ÷ 1.0263 = 51.28% — fair odds
$1.95 - 0.5000 ÷ 1.0263 = 48.72% — fair odds
$2.05
Those two prices are the market's honest view with the margin removed. Nobody offers them — they are a benchmark, not a bet.
Turning that into expected value
Once you have a fair probability, any price anywhere can be measured against it:
EV% = (fair probability × offered odds − 1) × 100
If the fair probability is 48.72% and a bookmaker somewhere is offering $2.15: (0.4872 × 2.15 − 1) × 100 = +4.7%. Bet that repeatedly and you would expect to make about 4.7 cents per dollar staked, in the long run, if the fair probability is right.
That last condition is doing all the work, and it is where most people go wrong.
Where the method breaks
- Proportional margin removal is an approximation.Splitting the margin evenly across both sides assumes bookmakers load it evenly. They do not — favourites are usually shaded harder than outsiders, so this slightly overstates the outsider's chance. There are more sophisticated methods; none of them are exact either.
- The benchmark is only as sharp as the market you take it from.A no-vig number derived from a soft market inherits its errors, and you can end up measuring one bookmaker's mistake against another's.
- A positive EV number is not a prediction. It is an estimate built on another estimate. A +4.7% bet loses very often — the whole claim is about many bets, not this one.
The most reliable check on whether your fair-odds estimates were any good is not your win rate, it is whether you consistently beat the price the market closed at. That is closing line value, and it is the number worth tracking once you start betting this way.
How much to stake
Finding a +4.7% price answers what to bet on, not how much. That is a separate question with a real answer — see the Kelly criterion.