🔢

# Odds/Pricing

This section covers how odds (or prices) work.

There are three types of odds participants can use when trading on the exchange:

*Probability**This is the default odds format on Aver Exchange. With Probability odds, a contract trades between 0 and 1 where a unit of the contract represents a $1 pay-out if correct.*

Probability Odds Pay-out Formula: Stake/Probability Odd = Pay-out

For example, a coin flip contract may trade at 0.50

**(Probability Odds) because it has a 1-in-2 chance of being correct. If you stake $1 on heads and the market resolves to that outcome, your payout would be $2.**Using the formula above: $1/0.50 = $2

*Decimals**Whenever you see odds displayed in numeric form (i.e. 9.00), with a value greater than 1, this is a decimal odd. Decimal odds allow you to easily calculate your pay-out if the market resolves to the outcome you backed.*

Decimal Odds Pay-out Formula: Stake x Decimal Odd = Pay-out

For example, a coin flip contract may trade at 2.0 (Decimal Odds), where the Decimal Odd represents the multiple on the amount staked that would be returned if the outcome is correct. If you stake $2 on heads and the market resolves to that outcome, your pay-out would be $4.

Using the formula above: $2 x 2.0 = $4

To convert Decimal Odds to Probability odds you simply need to divide the Decimal Odd by 1.

For example, a Decimal Odd of 5.00 implies a Probability of 0.20: 1/5.00 = 0.20

*.***American Odds (most popular with U.S. based sportsbooks) are centred around winning or wagering $100 on a given bet, though you don’t need to actually wager $100. It scales up and down depending on your position amount.**

*American Style*The odds for favourites will have a minus (-) sign in front, and indicate the money you need to stake to win $100.

American Odds (-) Pay-Out Formula: ((100/odd) x Stake) + Stake = Pay-out
The odds for underdogs will have a (+) positive sign in front, and indicate the amount won for every $100 staked.

American Odds (+) Pay-Out Formula: ((Odd/100) x Stake) + Stake = Pay-out
In both cases, winners get their initial stake back in addition to their winnings.

For example, let’s look at a baseball game between the Yankees and the Redsox with the following American Odds:

Yankees: -130
Red Sox: +120

If you want to back the Yankees to win at -130, you need to stake $130 to win $100 if they win the game. This makes your total pay-out $230 ($130 + $100).

However, if you want to back the Red Sox to win at +120, You need to stake $100 to win $120 if they win the game. This makes your total pay-out $220 ($100 + $120)

Last modified 2mo ago