What Is Positive Expected Value?
Positive expected value (+EV) means taking odds that are better than the true probability of an outcome implies. It does not guarantee any single bet will win. It means that, over time, consistently taking mispriced odds should produce a positive long-run return.
Example: Take a coin toss.
A fair coin lands heads 50% of the time, so the fair decimal price is 2.00. If a bookmaker offers 2.10, that bet is positive EV.
You can see the edge by comparing the bookmaker price to fair odds:
So you are being paid 5.0% above fair value, which is the same as an expected profit of $0.05 per $1 staked, or +5.0% EV.
| Event | True Probability | Fair Odds | Bookmaker Odds | EV |
|---|---|---|---|---|
| Coin toss 1 | 50.0% | 2.00 | 2.00 | 0.0% |
| Coin toss 2 | 50.0% | 2.00 | 2.10 | +5.0% |
| Coin toss 3 | 50.0% | 2.00 | 1.80 | -10.0% |
In the table above, Coin toss 1 is fair at 2.00, so there is no edge. Coin toss 2 is positive EV because 2.10 is above the fair price of 2.00 ((2.10 - 2.00) / 2.00 = +5.0%). Coin toss 3 is negative EV because 1.80 is below fair ((1.80 - 2.00) / 2.00 = -10.0%).
That gap matters over time: on $10,000 of turnover, a -10.0% edge implies an expected loss of $1,000, while a +5.0% edge implies an expected profit of $500. Please note that short-run results can still swing around that expectation. For more on that, see Variance.
A coin toss is a simplified statistical example because the true probability is known and the same trial can be repeated many times. In betting, the true probability is unknown, so any estimate of edge depends not just on outcomes, but on how accurately fair value has been estimated. Keep reading to see how OddsOtter estimates fair value in practice.
How we identify Positive EV Bets
OddsOtter estimates value using two market-based methods: Sharps EV and Midpoint EV. Because true probability cannot be observed directly, both use stronger market prices as practical proxies for fair value: Sharps EV compares bookmaker odds to a sharper market reference, while Midpoint EV compares them to the midpoint of an exchange back and lay spread.
Sharps EV compares bookmaker odds to a sharper market reference. The idea is that sharper markets, including exchanges and low-margin bookmakers, tend to absorb information faster and correct prices more efficiently, making them a practical proxy for fair value.1
Example: if a bookmaker offers 2.10 and the sharp reference is 2.00:
The bookmaker is 5.0% above the sharp reference.
1 Sharp reference odds shown here are post de-vigging, meaning bookmaker margin has been removed before they are used as a fair-value proxy.
Midpoint EV compares bookmaker odds against the midpoint of an exchange back and lay spread. In active head-to-head exchange markets, that midpoint can provide a useful reference because exchange pricing is often tighter and more transparent than bookmaker pricing. It also means you do not have to do any more complex de-vigging to produce a practical reference point.
Example: if exchange odds are 2.10 back and 2.12 lay, the midpoint is 2.11. If a bookmaker offers 2.20:
The bookmaker is 4.3% above the exchange midpoint.
Additional filters and quality checks sit behind the core calculations. These include de-vigging sharp reference prices, filtering stale or broken markets, checking spreads and market quality, and removing duplicate or lower-confidence signals.
OddsOtter continuously backtests results and monitors live performance. As more data is collected, filters, reference selection, and market-specific rules may be refined to improve signal quality and reduce false positives.