Kelly Criterion Calculator for Prediction Markets

The Kelly Criterion tells you exactly how much to bet based on your edge. Here's how to apply it to Polymarket and Kalshi.

The Kelly Formula

Kelly % = (bp - q) / b

• b = decimal odds minus 1 (e.g., buying at 40¢ means b = 1.5)
• p = your estimated probability of winning
• q = 1 - p (probability of losing)

Example

A market is priced at 40¢ YES. You estimate the true probability is 55%. Kelly says: (1.5 × 0.55 - 0.45) / 1.5 = 25% of bankroll.

Half-Kelly

Most experienced traders use "half-Kelly" — betting half the suggested amount. This reduces variance significantly while capturing most of the expected growth.

Using Polifly's AI

Polifly's AI Analyzer automatically calculates Kelly-optimal position sizes based on its probability estimates, saving you the math.

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