Stake Betting Definition

What Is A Stake When Betting
Stake Betting Definition Synonym
Stake Betting Definition Meaning

Betting Stakes explained. You will see it repeated over and over again in our betting guide, have a betting plan. From money to betting strategy, have a plan! Money management is so important in order to stay in control and a staking plan can help out a lot. There are so many different systems which you could use. BETTING STAKE 'BETTING STAKE' is a 12 letter phrase starting with B and ending with E Crossword clues for 'BETTING STAKE'.

It doesn’t matter how good you are, how good your algorithm is, or how bulletproof you think your system is; If you screw up your betting stake strategy, you’re in trouble.

Bankroll management and your staking strategy aren’t just boring logistics. The difference in your risk, maximum drawdown, and profit potential can be gobsmacking when using just slightly different betting stake strategies.

So, we’re going to take you through the reasons to go with either level or proportional staking, as well as a couple of the more advanced staking strategies. We’ve even got a simulation calculator to weigh up the risks and rewards for yourself!

If you don’t want to hear me waffle on, skip to the end for the simulation calculator.

The Level Staking Strategy

Bet size = Constant amount

Okay, pay close attention. What you do for the Level Staking Strategy, is bet a predetermined amount. Then for the next bet, do the same amount. Then again. And again. Forever.

That’s level staking, just bet a consistent amount every bet.

Rigid, safe, effective; your bankroll grows, but your risk doesn’t. In fact, your risk goes down with every cent you add to your bankroll.

Of course, you must analyse a safe bet amount in the beginning, to mitigate the possibility of a heavy early drawdown and subsequent bankruptcy.

Level betting is typically used in a conservative way, but in some cases can be used aggressively. Giving you high bet size, high risk, and high-profit potential. It certainly has it’s place. But due to the fact you are not altering your bet size even in a large drawdown, the bankruptcy potential is at a maximum.

Level Staking Variant: The Level Up Staking Strategy

Bet size = Updated Constant amount

That’s not the real name, there isn’t really a real name. So now that is the real name.

The Level Up Staking Strategy is one that many, if not most, level bettors adhere to.

It basically says that once you reach a certain bankroll, for example – $10,000, your $10 stakes are just a bit too small. They worked when you had a $1000-$2000 bankroll, but now they are barely a smidgen of your bankroll.

Time to level up.

$30 stakes perhaps? Still in the conservative mould of a level betting strategy, but a nice level up.

..Wait a minute, that’s a little close to a proportional staking strategy. Oops.

The Proportional Staking Strategy

Bet size = Constant percentage of your bankroll

Now, for the real proportional staking strategy. With every single bet, your stake adjusts to a proportion or your current bankroll; a percentage of your bankroll at the time of betting.

First, you decide what percentage you would like to bet. Then you do the very simple maths each time you place a bet.

If you decide on 1%, you are betting $10 for a $1000 bankroll. If your bankroll is at $1250, you’re placing a $12.50 bet.

Proportional Staking Variant: Kelly Criterion

Bet size = Bankroll * (Odds * Probability of success – 1) / (Odds – 1)

Kelly Criterion is a lot more complex, hugely popular with top tier elite sports bettors. You need to know what you are doing to even begin to implement it.

Basically, the stake increases and decreases depending on how far the available odds are from where you believe they should be.

So your bankroll size, the odds, and your calculation of what the odds should be – are all factors that determine your bet size.

I’ll hand you over to Miguel, WinnerOdds creator and my co-writer here at TVVB, for a more expert explanation..:

This formula is the Expected Value of your bet (Bankroll * (Odds * Probability of success – 1)), divided by the net profit (Odds-1), and it can be demonstrated that using this formula, you get the maximum expected (and exponential) growth of your bankroll (https://en.wikipedia.org/wiki/Kelly_criterion).

As it is hard to know the exact probability of success of every bet, it is a good idea to apply a fraction (value between 0 and 1) to the original Kelly formula. Common values of fractional Kelly parameter are between 0.1 and 0.5, depending on your risk aversion:

Bet size = Bankroll * fraction * (Odds * Probability of success – 1) / (Odds – 1)

Extras

Here are two slight proportional staking variants with explanations from external resources.

Constant profit: You always win the same percentage of your bankroll
https://blog.pyckio.com/es/kelly-criteria-unit-impact-method/

Bet size = Constant profit percentage / (Odds – 1)

Constant impact: Your bankroll grows or decreases a constant value
https://mpra.ub.uni-muenchen.de/92196/1/MPRA_paper_92196.pdf

Bet size = Constant profit percentage / Odds

Which Betting Stake System Is Best?

In a poll recently undertaken by us here at The Value Betting Blog, of exclusively profitable bettors, we asked which staking method they preferred.

In an unsurprisingly inconclusive result, the outcome was:

30% for Level Staking
30% for Proportional Staking
20% for Kelly Criterion
20% with a personal method

Well, that was extremely unhelpful of them… I’ll try to be a little bit more helpful and take you through the circumstances in which you might use each system.

Level Staking is the tipsters standard. Each bet stands alone. You might consider this method if you are:

Trialling and testing a new system
Looking to place bets simply and rapidly
Looking for a conservative approach with smaller ‘expected maximum drawdown’ (small bet size)
Using an extremely aggressive method – with high early bankruptcy potential; high-profit potential (large bet size)
Wanting to simplify the process for followers

Level Up Staking is used for all the same reasons. With a slightly added risk and income potential, extra benefits are:

Faster bankroll growth
Clear bankroll goals

Proportional Staking just makes sense. Betting relative to your bankroll. Simple and effective. Reasons to implement:

Higher profit potential than level stakes
Theoretically, you can never go bankrupt
Simplicity and efficiency

Kelly Criterion is good if ~~you’re a show-off~~ you’re an advanced bettor with an intricate understanding of your winning probabilities. Use if:

Your methods are exact and know your way around a formula
You are willing to spend the time extracting every inch of value out of your value betting

Hopefully, this helps you grasp how and why to implement different betting stake strategies a little bit better. Of course, each of these methods has its own variations. You may use different proportions of your bankroll for different odds ranges, you may slightly alter and personalise the Kelly Criterion formula, and a host of other tweaks are used to cater to different value bettors.

But enough of all that, let’s get on to the calculator!

Staking Simulation Calculator

And here it is –

Let me explain, you have three metrics you can change:

Hitrate – Simply the percentage of your bets that win. Represented as a number between 0 and 1. When you input your hitrate the MPO(Minimum Profitable Odds) will automatically update. So in the above image, we have it set to a hitrate of 0.55, with that hitrate the minimum average odds we would need to be profitable is 1.81, as shown in the calculator.

Average Bet Size – The percentage of your starting bankroll that you will bet. For level staking this number won’t change, for proportional staking, this number will update after each bet in the simulation.

What Is A Stake When Betting

Odds – The odds you are finding. This number, in relation to your MPO, will define your yield.

We took the liberty of doing a simulation 500 times with a bet volume of 500, using these parameters:

Hitrate: 0.55 (MPO of 1.81)
Average Bet Size: 1
Odds: 2

The results were predictable, but interesting nonetheless.

The proportional staking method had a higher average bankroll as well as the highest maximum bankroll from the 500 simulations. But also suffered the lowest final bankroll after the simulations, nearly a full 200 less than the lowest for the level staking system.

Check the spreadsheet for more detailed results. Have a play around with the variables, run the 500 bet simulation with different methods and start to get an understanding of the ways they differ.

We are currently building a longer-term simulation with more changeable variables – stay tuned.

Betting Stake Strategy: Conclusion

If anything has become abundantly clear, it is that no single staking system rules all. All the above betting stake methods, as well as a host of others, have their place.

But, you don’t get a free rein to use whichever method you want just because they all can work. If you don’t know why you’re using the method you’re using, you’re already a step behind.

Nothing is accidental in value betting. If you place a bet, it needs to be with purpose. If you increase your staking percentage it needs to be with purpose. If you choose a new method you need to know exactly why you’re doing it.

Hopefully, this article and the included calculator, have helped you find your optimal staking method and why it is optimal for you.