Half Kelly: most of the growth for half the stake
Staking
With a 55% chance at even money, Kelly stakes 10% of the bankroll and grows it 0.501% per bet on average. Half Kelly grows it 0.375%: 75% of the growth.
- 10%full Kelly stake
- 75%of the growth at half Kelly
The Core Mechanism
The Kelly criterion calculates the optimal fraction of a bankroll to wager based on an estimated edge. Consider a scenario where a bettor holds the chance shown in the key figures at even money. The formula dictates a specific stake size to maximize long-term logarithmic growth. As the table below shows, the stake is far larger than the growth it buys: a tenth of the bankroll is at risk on every bet for an average gain of about half a percent. Readers should note that this calculation assumes the probability estimate is precise. Without an accurate input, the output stake becomes arbitrary rather than optimal.
| Stake | Growth per bet |
|---|---|
| Half Kelly | 0.38% |
| Full Kelly | 0.50% |
| Double Kelly | -0.0% |
Why Half Kelly Works
Many practitioners choose to wager half of the calculated Kelly amount. This approach retains a significant portion of the expected growth while reducing volatility. The table above illustrates that half Kelly keeps three-quarters of the growth achieved by the full stake. Although the absolute growth rate is lower, the reduction in stake size leads to smaller swings in the bankroll. This trade-off favors stability over maximum theoretical expansion. The share of growth retained is larger than the stake percentage itself, indicating efficient capital use. By halving the exposure, bettors mitigate the impact of variance without sacrificing the majority of their expected advantage. This balance appeals to those prioritizing consistency over aggressive compounding.
Prerequisites for Success
The Kelly criterion functions only when a genuine edge exists. If the probability estimate is flawed or the odds offer no value, the calculated stake may be incorrect or zero. An accurate probability assessment is essential for the formula to yield a meaningful result. When the edge is real, the stake size aligns with the strength of the advantage. Without this foundation, the system fails to provide a reliable framework for decision-making. The chance of winning must exceed the break-even threshold for the stake to be positive. Bettors must verify their inputs carefully, as the output depends entirely on the quality of these initial estimates. Garbage in leads to garbage out, regardless of the mathematical elegance of the formula. If betting stops being fun, free help is available.
Questions
What is the main benefit of Half Kelly?
Half Kelly retains most of the growth while significantly reducing bankroll volatility. It offers a balance between aggressive compounding and stability, keeping three-quarters of the growth with half the stake.
Does Half Kelly guarantee profits?
No. It relies on a real edge and accurate probability estimates. Without a genuine advantage, the calculated stake may not improve outcomes, and short-term results can still vary widely.
How does the stake size compare to growth?
The full Kelly stake is larger than the growth rate per bet. Half Kelly reduces the stake further, lowering the absolute growth rate but maintaining a high share of the potential return.
Why is probability accuracy important?
The Kelly formula calculates the optimal stake based on the estimated edge. If the probability estimate is inaccurate, the resulting stake may be suboptimal, reducing the effectiveness of the strategy.
Every figure on this page is computed by code from exact fractions for odds, margins and parlays, and closed-form Kelly growth, each checked by a seeded simulation. See the methodology.