Kelly criterion model
An educational look at the Kelly formula under explicit assumptions. Outputs are model results, not recommended allocations.
Enter a scenario
Use one currency and unit throughout. Every field is required; no market or personal financial data is loaded.
Scenario result
Fill in every field and the result appears here as you type. An empty field is missing information, not zero.
Sources and scope
Checked November 5, 2026.
Kelly criterion model uses the formulas shown above and assesses no personal financial circumstances.
Understand the assumptions in the Kelly criterion model
The mathematical fraction uses the assumed probability minus the unit price, divided by one minus that price. The settlement value is fixed at one in this model. A separate scale multiplies the resulting fraction; it does not change the probability assumption or supply evidence that the input is accurate.
Hypothetical example: an assumed probability of 0.60 and price of 0.50 yield a fraction of 0.20. A scale of 0.50 produces 0.10. These are model outputs, not suggested position sizes. A negative result is simply a negative model output.
The formula assumes repeated independent identical trials, a known probability and no fees or account limits. Real event contracts need not satisfy those conditions. The tool does not consider income, obligations, loss tolerance or correlated exposures.