Proportional margin removal
For each outcome, calculate q = 1 / decimal odds. Add these implied probabilities to get S. The market overround is (S − 1) × 100%. The proportional fair probability of each outcome is q / S. Its fair decimal price is S / q.
Worked example
At 1.90 on both sides of a two-outcome market, the implied probabilities sum to 105.263%. The overround is 5.263 percentage points. Dividing each implied probability by the sum gives 50% per side, equivalent to fair decimal odds of 2.00.
Questions
Does this identify the true probability?
It provides a margin-removal estimate under a proportional allocation assumption. Different de-vig methods can produce different estimates, particularly for asymmetric markets.
Which outcomes do I need?
Include every mutually exclusive and exhaustive outcome under the same settlement terms. For regulation football 1X2, include home, draw, and away prices from the same market.
Is overround the same as profit?
Overround describes a quoted probability total. Actual bookmaker profit also depends on stakes, outcomes, trading, and costs.
Continue with the margin guide, the arbitrage calculator, and the API contract.