Degens and SportCrypt allow you to choose how your odds are displayed amongst several possible formats. This article will describe the different odds formats we offer, and will hopefully help you pick which one you prefer to use.
What are odds?
First of all, although most of our readers will know this, we’ll quickly describe what odds actually represent and why they are so important to understand when betting.
Odds represent the amount of money you stand to win relative to how much you must risk. On a betting exchange like Degens, odds are offered by users and it is up to other users to decide whether they would like to accept these offers.
Because users are competing to provide the best offers, the offers at the top of the orderbook are usually close to what the market believes to be a fair value for an event. The fair value should reflect the underlying probability of an event, because most users are trying to maximise their long-term profit.
This is very similar to what happens on a stock exchange, for example, which is why sites like BetFair and Degens are called betting exchanges. For this reason, we sometimes call odds “prices”.
Fractional odds
Also known as traditional odds, this is usually what is assumed in day-to-day speech, as in “I’d give 10 to 1 against him showing up”. When the first number is bigger than the second number, the outcome is considered unlikely.
Although if you pick large enough numbers you can get pretty much any corresponding probability, in practice a relatively restricted set of odds is memorised and bookmakers will choose the closest available odds (rounding in their favour, naturally):
50.0% 1-1
52.4% 11-10
54.5% 6-5
55.6% 5-4
57.9% 11-8
60.0% 6-4
61.9% 13-8
...Except for UK bookmakers and certain horse race bets, fractional odds are not commonly used today by betting sites. Because it is rarely used in betting exchanges, and also because it is difficult to display nicely in a user interface, fractional odds are not offered by Degens.
Hong Kong odds
However, we do offer the Hong Kong odds format, which is closely related to fractional odds.
The idea behind Hong Kong odds is to fix the second number of fractional odds to always be 1 (and omit it), and allow the first number to have decimal places. Given fractional odds, just divide the two numbers together and you have the corresponding Hong Kong odds.
So, for example, 1–1 (even money) odds simply become “1”, 2–1 odds become “2”, 3–2 become “1.5”, and 2–3 become “0.667”.
Because they are not represented as fractions, with Hong Kind odds you don’t need to memorise or mentally compare fractions. For example, do you know off the top of your head which is better: 11–4 or 10–3?
Decimal odds
Most European users will feel more comfortable with what are known as decimal odds. The way that decimal odds are usually explained is that they represent the total amount that you will claim (including your stake) in the event that you win. For example, if you bet $10 at the decimal odds of 2.5, you will receive $25 back (your original stake of $10 plus $15 of winnings). Similarly, if you bet $10 at decimal odds of 1.5, you will receive only $15 back ($10 + $5).
Decimal odds of 2 represent even money. Numbers less than 2 represent likely events and numbers greater than 2 represent unlikely events. Note that it doesn’t make sense for decimal odds to be ≤ 1 since this would represent a no-win situation for the bettor. So, the odds are bounded in one direction, but not bounded in the other.
A very useful property of decimal odds is that they are the inverse of their implied probability. For example, given decimal odds of 2, we can calculate the probability of 1/2 = 0.5. Similarly, odds of 3 imply probability of 1/3 = 0.333.
In order to convert Hong Kong odds to/from decimal odds, simply add/subtract 1. So, for instance, 1.5 (HK) is equivalent to 2.5 (decimal).
American odds
In America it is most common to express odds in terms of how much must be staked to win 100 units or how much 100 units will win, in the cases of unlikely and likely events respectively. These two cases are distinguished by prefixing the number with either a “-” or a “+” sign respectively.
For example, american odds of -150 require 150 units to be bet to win 100 units. And odds of +150 will win 150 units given a 100 unit bet. Even money bets are usually expressed as +100 (although -100 would be the same thing).
A nice aspect of american odds is that they are symmetric. For instance, if you make a bet at +150, the person you are betting with is making a bet at -150. Contrast that to decimal odds where the values are 2.5 and 1.667.
American odds are usually not expressed with numbers after the decimal point.
Indonesian odds
Indonesian odds are identical to American odds, except that they represent the amount required to win 1 unit, or will be returned with a 1 unit bet.
Because of the smaller unit amount, Indonesian odds must be expressed with decimals.
Malaysian odds
Malaysian odds are based on a 1 unit stake, however the sign means the opposite of American/Indonesian. Negative numbers represent unlikely events and positive numbers represent likely events. Additionally, Malaysian odds are scaled such that they go from 1 to 0 or -1 to 0.
Malaysian odds are quite elegant, being symmetric and bounded in both directions.
Implied probability
The final odds type available on Degens is implied probability. As described above, this is just the inverse of the decimal odds.
Although not common on today’s betting exchanges, implied probability is what the Degens protocol uses internally, so if you are writing a market making or trading bot, you’ll need to convert your odds to this format when making orders or trades.
Choose odds right for you
All the odds formats above are just different ways of expressing the same thing. Each has different advantages and disadvantages, but mostly it comes down to personal preference and what you’re used to, so make sure you change your odds preference on your account settings page so you can see the orders available in your preferred format.
Tick sizes
Recall that with fractional odds bookmakers restrict themselves to a set of practical odds values (and round to the nearest one in their favour). This imposes what is called in financial markets a tick size, in other words the minimum possible incremental change in odds/prices. In a similar way, the lack of decimals in American odds provides a natural tick size limit.
Tick size is a sometimes overlooked but important parameter when designing markets. A tick size that is too small will result in less price competition, since you can get to the top of the orderbook with an inconsequential difference in price relative to the current best offer. On the other hand, a tick size that is too large prevents users from making offers at what they believe to be optimal values, and therefore can reduce liquidity. The minimum “spread” between the best bid and best ask (back/lay) is also limited by tick size.
Tick sizing can often have other second-order effects. For example, large-batch electronics component pricing often must be calculated in increments of 1/7th of an American penny, due to the smallest unit of Chinese currency and a pegged exchange rate.
Because of the above reasons, many stock markets were converted to a “decimal” pricing system around the turn of the millenium, having previously quoted instruments in 1/16ths of a dollar. Going further back, this was enabled by most currencies themselves being converted to decimal-based currencies, divided into sub-units of 100. Betting markets have similarly followed suit, pioneered by BetFair which since its inception chose to present decimalized odds by default.
