# Overround

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Canonical: https://novigapi.com/learn/overround

The overround is the amount by which the implied probabilities of every outcome in a market add up to more than 100%.

```
overround = (q_1 + q_2 + ... + q_n) - 1
```

The overround measures how much a book has inflated a market above fair. Add the implied probability of every outcome. A perfectly fair market adds to exactly 100%; a typical sportsbook market adds to 103% to 110%, and futures markets with many outcomes often add to far more. The excess above 100% is the overround. It is the raw form of the margin; the vig and hold are the same idea expressed as a share of money wagered.

## How it works

The overround and the hold are related but not equal. If a market's implied probabilities sum to S, the overround is S - 1 and the hold, the share of a balanced handle the book keeps, is 1 - 1/S. For a -110/-110 market S is 1.04762, so the overround is 4.762% while the hold is 4.545%. The two numbers converge for small margins and drift apart for large ones.

```
hold = 1 - 1 / (1 + overround)
```
An overround of 4.762% gives a hold of 4.545%; an overround of 9.091% gives a hold of 8.333%.

## Worked example: a four-team futures market

Overround on a futures market

| Team | Odds | Implied | Fair (multiplicative) |
| --- | --- | --- | --- |
| Team A | +150 | 40.000% | 38.889% |
| Team B | +250 | 28.571% | 27.778% |
| Team C | +400 | 20.000% | 19.444% |
| Team D | +600 | 14.286% | 13.889% |
| Total |  | 102.857% | 100.000% |


The implied probabilities sum to 102.857%, so the overround is 2.857% and the hold is 1 - 1/1.02857 = 2.778%. Real futures markets with thirty teams usually carry a much larger overround, often spread unevenly with most of it on the long shots. The [hold calculator](https://novigapi.com/hold-calculator) handles markets with any number of outcomes.

## On Novig

An exchange like Novig has no house overround. If you add the best bids on Yes and No you get less than 100%, and if you add the two implied asks you get more. With a Yes bid of 55% and a No bid of 42%, the bids sum to 97% and the asks to 58% + 45% = 103%. That 3-point gap is the bid-ask spread, set by traders, and it often narrows to a single point on busy markets. On live game markets the taker fee, 0.06 x P x (1 - P) per contract, adds to the cost of crossing it.

## When it matters

The overround tells you how much you are paying to play a market, so it guides where you bet. A market with a 2% overround is far cheaper than one with 8%, even if the favorite's price looks similar. It also explains why parlays and futures cost more: every extra outcome adds its share of the margin.

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