Fundamentals
How to Calculate Implied Probability
The conversion that turns any price into a number you can reason about.
From decimal odds
Implied probability = 100 / decimal odds. The simplest of the three conversions.
From fractional and moneyline odds
Fractional odds a/b first convert to decimal via 1 + a/b, then follow the same formula. Moneyline converts to decimal first, then to implied probability.
What to actually do with the number
Compare implied probability against your own estimate of the true probability - a meaningful gap in your favor is edge.
FAQ
Why doesn't implied probability equal true probability?
Because it includes the bookmaker's margin.
Can I do this for a whole market at once?
Yes - sum the implied probability of every outcome to see the market's total margin.