As an experienced sports bettor and data analyst, I‘m often asked if negative odds are "good" when betting. This seems like a simple yes or no question, but there‘s a lot more nuance to understanding odds than just positive or negative. My goal is to provide an extensive expert guide to negative odds that equips bettors to make informed wagers.
What do negative odds mean?
In betting, negative odds indicate a favorite while positive odds indicate an underdog.
Negative odds show how much you need to bet to win $100. For example:
- Odds of -200 mean you would need to bet $200 to profit $100
- Odds of -120 mean you need to bet $120 to profit $100
The higher the negative number, the bigger the favorite they are. -1000 odds means you‘d need to bet $1000 just to get $100 in winnings!
Positive odds show how much you‘d win from a $100 bet. For instance:
- +150 odds mean a $100 bet would return $250
- +300 odds mean a $100 bet would return $400
The higher the positive number, the bigger the underdog.
So why display odds this way? Negative odds indicate likely outcomes that sportsbooks expect to happen. Favorites have a greater probability of winning – that‘s why you risk more to profit less.
Positive odds compensate bettors for taking on the risk of unlikely outcomes. Underdogs have smaller chances, so the potential payouts are higher.
Why are negative odds favored to win?
Sportsbooks assign negative odds to favorites because their probability of winning is higher. These odds reflect projected likelihoods based on factors like:
- Team strengths
- Home field advantage
- Injuries and roster changes
- Statistical matchups
- Historic trends and results
The math behind the odds translates probability into a betting price.
Here are some examples of implied win probability based on negative odds:
- -300 odds mean 75% chance of winning
- -200 odds mean 67% chance
- -150 odds mean 60% chance
The payouts are lower because these outcomes are more expected to happen. Think of it as a reward vs risk scale:
Favorites have:
- Higher win probability
- Lower risk of losing bets
- Lower potential payouts
Underdogs have:
- Lower win probability
- Higher risk of losing bets
- Higher potential payouts
Books aim to incentivize bettors properly based on those factors.
Evaluating negative vs positive odds
There‘s a common perception that favorites with negative odds are "better" bets. After all, they‘re deemed more likely to win. But when evaluating odds, you also have to consider the payout ratios.
Heavy favorites come with a big catch – you risk a lot to win a little. A $100 bet on -300 odds profits just $33. That‘s a big investment for a small return.
Conversely, positive underdog odds return huge profits on small wagers. A $100 bet on +300 odds nets $400 in winnings!
So favorites are not inherently "good" odds. It comes down to the payout ratio versus implied probability.
Here are general guidelines on negative and positive odds:
- Favorites make sense for safer, small yield bets
- Underdogs make sense for riskier, high yield bets
Of course exceptions exist when the odds are off. Value emerges when the probability differs from the odds, regardless of sign.
Finding "good" odds
How do you determine if odds are good or bad? It‘s all about finding value where the odds deviate from the true probabilities.
Good odds reflect probabilities accurately. You‘ll have an edge betting on your predictive probabilities versus the implied odds.
Bad odds misrepresent probabilities. This creates -EV bets where the sportsbooks have the edge over you.
Here are tips on interpreting negative and positive odds to find value:
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Convert odds to percentage win probability – this lets you compare implied versus predictive probability side-by-side.
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Compare probability to team strength – if a heavy favorite seems overvalued, look for betting value on the underdog.
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Line shop across books – find the best odds for both favorites and underdogs by shopping around.
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Wait for line movement – odds change based on betting action. Movement can signal if the public is right or wrong.
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Trust predictive models – lean on data-driven models to project game outcomes versus relying on biased hunches.
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Bet probabilistic outcomes – for example, bet the under on a total if you think the model‘s projected score is lower.
By quantifying your own probabilities versus the odds, you can accurately spot value on both favorites and underdogs.
Examples of good and bad negative odds
Let‘s look at two examples to illustrate the difference between good and bad negative odds:
Example 1
- Chiefs -950 odds to beat the Texans
- Your calculated win probability – Chiefs have 85% chance
These odds overestimate how likely the Chiefs are to win. Despite being favorites, there is value betting on the Texans as underdogs.
Example 2
- Warriors -220 odds to beat the Grizzlies
- Your calculated win probability – Warriors have 70% chance
These odds closely match the Warriors‘ chances. There is no clear value on either side, so avoid betting this game.
Final advice on negative odds
While favorites with negative odds win most often, that alone does not make them worth betting. You need an edge over the sportsbooks, and that only comes from spotting value.
Here are my key takeaways on negative odds:
- They indicate likely favorites, but may still be overvalued
- Compare the implied probability to your own projections
- Look for overlays on underdogs when odds overestimate favorites
- Don‘t assume heavy favorites are "locks" to win and cover
- Shop around foroptimal odds on both favorites and underdogs
If you take one thing away, just remember that any odds can be good or bad. Focus on making +EV wagers based on value over probability.
Hopefully this deep dive helps explain negative odds and gives you tools to leverage them in your sports betting! Please reach out if you need any clarification or have additional questions. I‘m always happy to chat more about the odds.
