THE MATHS, MADE CLEAR
How it works
Convert every price to implied probability, add the probabilities, then compare the total with 100%. Proportional no-vig normalisation divides each implied probability by that market total.
Overround = Σ(1 ÷ decimal odds) − 1. Fair probabilityᵢ = implied probabilityᵢ ÷ Σ implied probabilities.
Worked examples
Two-way market
At 1.91 and 1.91, total implied probability is 104.71% and overround is 4.71%. Proportional normalisation gives each side 50% and fair odds of 2.00.
Three-way market
Odds of 2.40, 3.30 and 3.10 imply 41.67%, 30.30% and 32.26%. The 104.23% total is normalised back to 100% before no-vig odds are calculated.
Limitations and interpretation
Proportional normalisation assumes the margin is distributed proportionally across outcomes. Other margin-removal models can produce different estimates. No-vig probabilities are not guaranteed true probabilities.