Kelly Formula Calculator

Calculate Kelly Percentage



Formula

To calculate the Kelly percentage:

\[ K = \left( \frac{WP - (1 - WP)}{WLR} \right) \times 100 \]

Where:

What is the Kelly Criterion?

The Kelly Criterion is a formula used to determine the optimal size of a series of bets. In gambling and investing, the Kelly Criterion calculates the percentage of capital to be used in each bet or investment to maximize the logarithm of wealth. The goal is to maximize the expected value of the logarithm of wealth, which is equivalent to maximizing the expected geometric growth rate.

Example Calculation

Let's assume the following values:

Using the formula:

\[ K = \left( \frac{0.6 - (1 - 0.6)}{2} \right) \times 100 = \left( \frac{0.6 - 0.4}{2} \right) \times 100 = \left( \frac{0.2}{2} \right) \times 100 = 0.1 \times 100 = 10\% \]

The Kelly Percentage is 10%.