Implied Probability Calculator
Convert odds to implied probability and vice versa. Supports prediction market prices, decimal odds, fractional odds, and American odds.
What Is Implied Probability?
Implied probability is the probability of an event occurring as derived from market pricing or odds. In prediction markets like Polymarket and Kalshi, the contract price directly represents the implied probability — a YES contract at $0.65 implies a 65% chance the event will occur. In traditional betting markets, odds must be converted to extract the implied probability.
Understanding implied probability is essential for identifying value in prediction markets. When your assessed probability differs from the market-implied probability, an edge exists. If you believe an event has a 75% chance of happening but the market prices it at 55%, you have a 20-percentage-point edge — the foundation of profitable prediction market trading.
Conversion Formulas
Decimal Odds: Probability = (1 / Decimal Odds) × 100%
American (+): Probability = 100 / (Odds + 100) × 100%
American (-): Probability = |Odds| / (|Odds| + 100) × 100%
Fractional (a/b): Probability = b / (a + b) × 100%
Odds Conversion Quick Reference
| Probability | Prediction Price | Decimal | American | Fractional |
|---|---|---|---|---|
| 10% | $0.10 | 10.00 | +900 | 9/1 |
| 25% | $0.25 | 4.00 | +300 | 3/1 |
| 33% | $0.33 | 3.00 | +200 | 2/1 |
| 50% | $0.50 | 2.00 | +100 | 1/1 |
| 60% | $0.60 | 1.67 | -150 | 2/3 |
| 75% | $0.75 | 1.33 | -300 | 1/3 |
| 90% | $0.90 | 1.11 | -900 | 1/9 |
Using Implied Probability in Prediction Markets
The primary application of implied probability in prediction markets is identifying value. The process is:
- Step 1: Check the market-implied probability (the contract price)
- Step 2: Assess your own probability based on research, data, and analysis
- Step 3: If your probability is significantly higher than the market's, the contract is underpriced — consider buying YES
- Step 4: If your probability is significantly lower, the contract is overpriced — consider buying NO
- Step 5: Size the position using Kelly Criterion based on the size of your edge
Vector Ridge's Polymarket signals perform this probability assessment systematically across hundreds of prediction markets, identifying the contracts where macro analysis provides a genuine edge over the market-implied probability.
Related Tools
- Polymarket Calculator — Kelly Criterion sizing and arbitrage detection
- Polymarket Signals — expert prediction market picks from $29.99/month
- Polymarket Strategy Guide — complete prediction market trading framework
- Polymarket Arbitrage Guide — finding risk-free opportunities
The probability of an event as reflected by market pricing. A prediction market contract at $0.65 implies 65% probability. Decimal odds of 2.00 imply 50%.
Prediction market contracts trade between $0 and $1. The price equals the implied probability. A $0.40 YES contract means the market prices the event at 40% likely. If it occurs, you receive $1. If not, you lose $0.40.
Positive odds (+200): 100 / (200+100) = 33.3%. Negative odds (-150): 150 / (150+100) = 60%. The calculator above handles all formats automatically.
When implied probabilities for all outcomes sum to more than 100%. Represents the market maker's margin. Below 100% (underround) = arbitrage opportunity. Use the Polymarket Calculator to detect these.