How to Read American Odds & Implied Probability
Implied probability is the chance of an outcome that a price implies. It lets you compare any odds format on the same scale.
Formulas
- Negative odds (favorite):
prob = odds ÷ (odds + 100), using the absolute value. -150 → 150 ÷ 250 = 60%. - Positive odds (underdog):
prob = 100 ÷ (odds + 100). +130 → 100 ÷ 230 = 43.5%.
The vig
Add up both sides: 60% + 43.5% = 103.5%. The extra 3.5% over 100% is the bookmaker's margin. A standard -110/-110 market adds up to 104.8%. To estimate a "fair" (no-vig) probability, divide each side by the total: 60 ÷ 103.5 ≈ 58%.
Payout
Profit on a $100 stake is 100 × 100 ÷ |odds| for negative odds and simply the odds for positive odds. Decimal odds = 1 + profit per $1 staked (-150 = 1.667, +130 = 2.30).
Prediction markets
On exchanges like Kalshi, a contract pays $1 if the event happens. A price of $0.60 implies roughly 60%, before fees. To convert to American odds: if p ≥ 50%, odds = −100·p/(1−p); otherwise odds = +100·(1−p)/p. That's how our Kalshi vs sportsbooks page puts both on the same scale.