EV Calculation

What is Expected Value?

Expected Value (EV) measures the average profit or loss per bet over time.

EV = (Probability of Winning × Profit) - (Probability of Losing × Stake)

A positive EV (+EV) bet is profitable long-term.

Simple Example

Coin flip at +110 odds:

• Win probability: 50%
• Win payout: $110
• Lose amount: $100

EV = (0.50 × $110) - (0.50 × $100)
EV = $55 - $50
EV = +$5 per $100 bet (5% EV)

Tip: A 5% EV means you expect to profit $5 for every $100 wagered over time.

SharpAPI’s EV Calculation

We use Pinnacle (a sharp book) as the source of truth for “fair” probability.

Step 1: Get Sharp Book Odds

Pinnacle odds: Team A -115 / Team B +105

Step 2: Remove the Vig

// Implied probabilities (with vig)
probA = 1 / 1.87 = 0.535  // -115
probB = 1 / 2.05 = 0.488  // +105
total = 1.023  // 2.3% vig
 
// No-vig (fair) probabilities
fairProbA = 0.535 / 1.023 = 0.523 (52.3%)
fairProbB = 0.488 / 1.023 = 0.477 (47.7%)

Step 3: Compare to Soft Book

DraftKings odds: Team A -105 (decimal 1.952)
Fair probability: 52.3%

EV% = (fairProb × decimalOdds - 1) × 100
EV% = (0.523 × 1.952 - 1) × 100
EV% = +2.1%

The EV Formula

EV% = (fair_probability × decimal_odds - 1) × 100

Where:

• fair_probability = No-vig probability from sharp book
• decimal_odds = Soft book odds in decimal format

Why This Works

When soft books are slow to adjust, their odds imply a lower probability than reality = +EV opportunity.

EV Thresholds

Note: SharpAPI’s default threshold is 2% EV. Adjust with the threshold parameter.

Variance Warning

+EV doesn’t guarantee profit on every bet:

100 bets at +5% EV, $100 each:
- Expected profit: $500
- Actual results: Anywhere from -$2000 to +$3000

With 1000 bets:
- Results converge toward +$5000

Warning: EV is a long-term concept. Short-term variance can be brutal. Never bet more than you can afford to lose.