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Core ConceptsEV Calculation

EV Calculation

What is Expected Value?Permalink for this section

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 ExamplePermalink for this section

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 CalculationPermalink for this section

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

Step 1: Get Sharp Book OddsPermalink for this section

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

Step 2: Remove the VigPermalink for this section

// 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 BookPermalink for this section

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 FormulaPermalink for this section

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 WorksPermalink for this section

Book TypeCharacteristics
Sharp (Pinnacle)Low vig, efficient odds, accurate probabilities
Soft (DraftKings)Higher vig, slower to adjust, exploitable

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

EV ThresholdsPermalink for this section

EV %QualityAction
< 0%Negative EVNever bet
0-2%MarginalHigh volume only
2-5%GoodStandard threshold
5%+ExcellentHigh confidence

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

Quality TiersPermalink for this section

The EV Thresholds table above is a rough heuristic. In practice stated EV and realized results diverge, so SharpAPI stamps every +EV opportunity with a grader-certified quality_tier (A / B / C) derived from its historical grading ledger — hundreds of thousands of picks scored against closing lines and settled outcomes.

Why a tier, not just a numberPermalink for this section

When picks are graded against real results, realized ROI generally rises with stated EV — but the low bands bleed. The bulk of published volume sits in the sub-2% EV band, which has historically graded negative once vig and post-detection line movement are accounted for; the 2–4% band is roughly break-even. Durable, repeatable edge concentrates where a large stated EV is corroborated by the sharpest reference (Pinnacle), on a prematch market, in a segment that hasn’t historically underperformed. Rather than delete the weaker bands — a real loss of market breadth — each opportunity is labeled with the tier its evidence supports.

The tiersPermalink for this section

  • A — bet this. ev_percentage ≥ 4 (≥ 6 for player props), Pinnacle-anchored, prematch, and the (book, sport, market) segment is unflagged by the nightly reliability model. The class with consistently positive graded ROI.
  • B — edge. ev_percentage ≥ 2 (≥ 4 for props) and the segment isn’t exclusion-flagged. Includes live, non-Pinnacle-anchored, and watch-flagged rows — historically around break-even.
  • C — informational. Everything else, plus any exclusion-flagged segment regardless of EV. Surfaced as market intelligence, not a recommended bet.

Segment reliabilityPermalink for this section

A tier is not EV alone. A nightly model scores each (book, sport, market) segment against its own graded history and can cap an otherwise-strong row:

  • a watch flag caps a segment at B — its results are shaky but not disqualifying;
  • an exclude flag forces C no matter how large the stated edge, because those cells have historically posted deeply negative ROI. A big EV number there is a red flag, not an opportunity.

This is why a prematch, Pinnacle-anchored row with a high ev_percentage can still land B or C. The bands and flags track the ledger: the reliability table is regenerated on a schedule, so tiers reflect current — not stale — evidence.

Warning: A tier reflects the historical graded performance of similar opportunities — it is not a guarantee for any single bet. Even tier A carries real variance; size with fractional Kelly and never bet more than you can afford to lose.

Variance WarningPermalink for this section

+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.

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