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Odds & Implied Probability

American odds format

SharpSDA shows American oddsAmerican-format odds. Negative (e.g. -150) means favorite — risk $150 to win $100. Positive (e.g. +130) means underdog — risk $100 to win $130.. The sign tells you which side is the favorite vs. the underdog:

Negative (e.g. −150): favorite. Risk $150 to win $100.
Positive (e.g. +130): underdog. Risk $100 to win $130.

Converting to probability

Every price encodes an implied win probabilityThe win probability encoded in a betting line. Convert American odds: negative odds → |odds|/(|odds|+100); positive odds → 100/(odds+100). E.g. -150 ≈ 60%, +130 ≈ 43%.. Here is the formula:

Negative odds (e.g. −150): |odds| / (|odds| + 100) = 150/250 = 60.0%

Positive odds (e.g. +130): 100 / (odds + 100) = 100/230 = 43.5%

The sum of both teams' implied probabilities exceeds 100% — the excess is the sportsbook's margin (the "juice" or "vig").

The -110 standard

Most MLB moneylines for close games are priced around −110 on each side. At −110, you need to win 52.4% of the time to break even. The model must identify picks with a true win probability above the break-even threshold to produce positive ROIReturn on Investment. Net profit divided by total units staked. Measures efficiency across bets of different sizes. long term.

Why odds matter for edge

A team priced at −200 (66.7% implied) needs the model to believe their true probability is higher than 66.7% before there is positive edgeThe gap between the model's win probability and the market-implied probability at bet time. Positive edge means the model thinks the outcome is more likely than the price implies.. Betting a big favorite at a fair price is not an edge — finding a mispriced favorite is.