# Expected value

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Canonical: https://novigapi.com/learn/expected-value

Expected value is the average amount a bet wins or loses per play if it could be repeated many times at the same price and probability.

```
EV = p_win x profit_if_win - (1 - p_win) x stake
```

Expected value, or EV, is the probability-weighted average result of a bet. It folds every possible outcome into one number: how much you win or lose per bet on average. A bet with an EV of +$5 will not pay exactly $5 on any single play, but over a thousand plays the average result converges on $5 a bet. EV is the core quantity behind every betting and trading decision, and positive EV is the only kind worth making on purpose.

## How it works

List each outcome, its probability and its payoff, multiply the two, and add. For a simple win-or-lose bet that reduces to the probability of winning times the profit, minus the probability of losing times the stake. The probability must be your best fair estimate, not the price's implied probability; if you plug in the implied probability you will always get an EV close to zero, minus the vig.

## Worked example

A $100 bet at +150 that you believe wins 42% of the time: EV = 0.42 x $150 - 0.58 x $100 = $63 - $58 = +$5.00, a 5% expected return.

The same logic applies to a Novig contract. Buy Yes at 40% when you believe the true chance is 45%. Each $1 of payout costs $0.40, wins $0.60 with probability 0.45 and loses $0.40 with probability 0.55, so EV = 0.45 - 0.40 = $0.05 per contract before fees.

EV of 100 Novig contracts bought at 40% with a 45% fair probability

| Timing | Cost | EV before fee | Taker fee | EV after fee |
| --- | --- | --- | --- | --- |
| Pregame game market | $40.00 | $5.00 | $0.00 | $5.00 |
| Live game market | $40.00 | $5.00 | $1.44 | $3.56 |


```
live fee = 0.06 x 0.40 x 0.60 x 100 = $1.44
```
Per Novig's fees page, game markets charge the taker only while the event is in-game.

The fee takes 29% of the edge on that live fill, which is why timing matters on Novig. The [EV calculator](https://novigapi.com/ev-calculator) works the same sum for any price, and the [Novig fee calculator](https://novigapi.com/novig-fee-calculator) gives the fee on any fill.

## On Novig

Novig prices are probabilities, so EV on a contract is simply your fair probability minus the price, minus any fee. Per [Novig trading fees](https://docs.novig.com/api/concepts/fees) (checked 12 Nov 2026), the taker fee is 0.06 x P x (1 - P) per $1 of payout on most markets; makers pay no fee and earn a credit of 25% of the taker's fee on live game fills. A maker who rests a bid at 40% with a 45% fair estimate keeps the full $0.05 edge and collects the credit if the fill happens in-game.

## Common mistakes

- Confusing EV with the most likely result. A +EV long shot loses most of the time.
- Using your own gut probability with no benchmark. Anchor fair estimates to a sharp or exchange price.
- Leaving fees and the spread out of the sum. Both come straight off the EV.

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