Assuming the coin and the toss are fair, each outcome (heads or tails) has an equal probability of 50% - therefore the odds offered on a fair market would be 2.0. Let’s use a coin toss as an example of calculating expected value. (Amount won per bet * probability of winning) – (Amount lost per bet * probability of losing) The formula to calculate expected value for betting is fairly simple: All bettors should be aiming to identify betting value with every bet they make. Positive expected value (+EV) implies profit over time, while a negative value (-EV) implies a loss over time.
In betting, the expected value (EV) is the measure of what a bettor can expect to win or lose per bet placed on the same odds time and time again. Expected value is a predicted value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence. This article explains how to calculate and measure expected value, and shows how it can be used to find value bets. Whether you're betting with a bookmaker or on an exchange, calculating the expected value of a trade is fundamental.
