> ## Documentation Index
> Fetch the complete documentation index at: https://docs.qauntom.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Kelly Criterion

> Optimal bet sizing to maximize long-term growth

# Kelly Criterion

The Kelly Criterion is a formula that determines the optimal percentage of your bankroll to wager on a given bet, based on your edge and the payout odds.

## The formula

```
Kelly % = (bp - q) / b
```

Where:

* **b** = the payout multiplier (net odds received on the bet)
* **p** = probability of winning
* **q** = probability of losing (1 - p)

## Example

If a bet has a 55% chance of winning at even odds (1:1 payout):

```
Kelly % = (1 x 0.55 - 0.45) / 1 = 10%
```

You should wager 10% of your bankroll.

## Fractional Kelly

Most bettors use **fractional Kelly** (typically 1/4 to 1/2 Kelly) to reduce variance. Full Kelly maximizes growth rate but can lead to large swings.

Qauntom's built-in Kelly calculator shows both full and fractional Kelly sizing for any signal.

<Tip>
  Start with quarter-Kelly (25% of the Kelly recommendation) if you're new to bankroll management. You'll grow slower but with much less risk of a big drawdown.
</Tip>