Kelley Criterion Calculator for Stocks


The Kelley Criterion is a formula used in risk management and investment strategy to determine the optimal size of a series of bets or investments. In the context of stock investing, it helps determine what percentage of your capital you should allocate to a particular investment opportunity.

Modified Equation

The modified Kelley Criterion formula used in this calculator is:

f = (bp – q) / b


  • f is the fraction of the current bankroll to invest
  • b is the net odds received on a winning bet (expected return as a decimal)
  • p is the probability of winning (as a decimal)
  • q is the probability of losing (1 – p)

Note: This formula takes into account the expected loss percentage, allowing for more realistic scenarios where you don’t lose 100% of your investment on a losing trade.


Additional Information

  • This is a theoretical optimal value and may be too aggressive for many investors.
  • Many professional investors use a fraction (e.g., half) of the Kelly percentage to be more conservative.
  • The accuracy of the calculation depends heavily on the accuracy of your probability, expected return, and expected loss estimates.
  • Past performance doesn’t guarantee future results. Always consider your risk tolerance and diversification strategy.

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