The Kelly Criterion

How much to bet

An interactive lesson with 7 steps, about 6 minutes: you predict, drag and solve, with instant feedback on every answer. It runs in your browser and needs JavaScript.

What you’ll learn

• Repeated bets compound, so maximise the average growth rate, not the expected value per bet.
• Kelly fraction: $f^* = p - q/b$.
• Overbetting, even with an edge, can make your money shrink.

Steps

1. A favourable coin
2. Maximise growth
3. Kelly’s formula
4. Same luck, different bets
5. Better odds
6. Half Kelly
7. Doubling time