Expected value is what a trade is worth on average if you could repeat it many times. It combines your estimate of the probability with the price and the payout.
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Expected Value (EV): Expected value is what a trade is worth on average if you could repeat it many times. It combines your estimate of the probability with the price and the payout.
What it means
Expected value is what a trade is worth on average if you could repeat it many times. It combines your estimate of the probability with the price and the payout.
Example
You think an event has a 60% chance and YES costs 50¢. EV per contract = 0.60 × $1 − 50¢ = +10¢ before fees. If your estimate is wrong, so is the EV.
Practical tip
Positive EV doesn't guarantee a win on any single trade. Use our EV calculator and include fees.
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