OP, how would you determine the right stake for a value bet you have identified?
Let's say you can bet on only one coin toss, your chance is 50% but the payout rate is say 2.5. What percent of your betting funds would you put at stake and what logic/formula would you use?
Kelly Criterion is a formula that helps determine the optimal percentage of your bankroll to wager:
f = (bp - q) / b
f is the fraction of your bankroll to bet
b is the payout rate minus one
p is the probability of winning
q is the probability of losing
In this case:
f = (1.5 * 0.5 - 0.5) / 1.5 = 0.1667
So, you should bet 16.67% of your bankroll on the coin toss.
In value betting, it is generally recommended to not exceed a certain percentage, such as 2% of your bankroll, to mitigate potential losses and manage risk effectively