Expected value and edge

Write down the probability you believe, and where it came from. Without a documented source, everything downstream is unfalsifiable.

The fair decimal price is 1 divided by your probability. This is the break-even price for your estimate — the point where expected value is zero.

Expected value per unit staked is (your probability × (decimal price − 1)) − (1 − your probability). A positive figure means the price is generous relative to your estimate, and only relative to your estimate.

Compare your probability to the market's margin-adjusted probability. A wide gap in a liquid market is usually evidence of a modelling error, not a mispricing.

Expected value is a statement about a distribution. Judge it across hundreds of outcomes, not across a week, and never treat a short record as validation.