Decimal odds

At BetDEX, you can bet on or provide liquidity at a pre-determined list of acceptable prices, the full list of which can be found Valid Decimal & American Odds

With decimal odds, the price or odds represents the total payout.

The total (potential) return can be calculated as:

$$S * D = T_p$$

where: S is the Stake D is the Decimal Odds Tp is the Total Profit

Backing with Decimal Odds

Let's take a look at an example to understand how backing with decimal odds works:

Lets stay I had $10 and wanted to bet on the Yankees. The current market price where there is available liquidity is 1.45.

Therefore at odds of of 1.45, I would bet $10 to get a potential profit of $4.5, for a total potential return of $14.5.

Laying with Decimal Odds

In the same example above, lets say I wanted to bet against the Yankees, or lay them.

When a user lays an outcome they need to risk a certain amount of capital to post the potential profits that a backer (or better who is betting on the Yankees) can win, that is known as the stake.

To calculate the amount that the user risks, the formula is

$$R = S *(D-1)$$

where: R is the Risk S is the Stake D is the Decimal Odds

Taking the same scenario as above, if the user wanted to lay the Yankees at a price of 1.45, they would need to risk $4.5 to offer the backer a profit of $10.

The Relationship between Decimal Odds and Probability

Decimal odds can be easily converted into probabilities by using the following formula

$$1/D = P$$

where:

D is the decimal odd P is the probability

If we wanted to convert the decimal odds of Nottingham Forest into a probability we would do the following calculation:

1 / 12.5 = 0.08

To express this as a percentage we can multiply the probability by 100:

0.08 * 100 = 8%

In other words, at the current prices, Nottingham Forest have an 8% chance of beating Liverpool.