Formula used
The Kelly fraction estimates long-run growth. Fractional Kelly reduces volatility and estimation risk.
Never treat model output as guaranteed. Inputs can be wrong, unstable, or incomplete.
How to use this calculator
- Select the formula matching your available data.
- Enter capital, probability, gain, loss, costs, and volatility.
- Choose a fractional Kelly strategy and conservative haircut.
- Apply allocation, reserve, exposure, and leverage limits.
- Review scenarios, simulation, growth, and portfolio comparisons.
- Export the results before making an independent decision.
Example data table
| Example | Probability | Gain | Loss | Suggested starting strategy |
|---|---|---|---|---|
| Diversified stock setup | 58% | 15% | 10% | Quarter Kelly |
| Startup investment | 25% | 300% | 100% | One-eighth Kelly |
| Options trade | 45% | 40% | 20% | Quarter Kelly |
| Real-estate opportunity | 65% | 18% | 8% | Half Kelly |
| High-volatility crypto setup | 52% | 35% | 25% | One-eighth Kelly |
Frequently asked questions
What does a negative Kelly result mean?
It means the assumptions show no positive edge. The calculator recommends no allocation.
Why use fractional Kelly?
Fractional Kelly lowers volatility and drawdowns. It also reduces damage from estimation errors.
Can Kelly exceed 100%?
Yes, especially with leverage. Most investors apply strict caps before using that output.
How accurate must probability estimates be?
They must be reasonably reliable. Small errors can materially change the recommended allocation.
Does this calculator include costs?
Yes. Fees, taxes, and slippage reduce gains or increase effective losses.
What is continuous Kelly?
It uses expected return, risk-free rate, and variance. It suits simplified continuous-return models.
What is the break-even probability?
It is the minimum win probability needed. Expected value becomes zero there.
Should I trust the simulation?
Use it as a risk illustration. It depends entirely on entered assumptions.
Is this personalized financial advice?
No. It is an educational decision-support tool. Consult a qualified professional when needed.
Important disclaimer
Kelly calculations rely on uncertain estimates. Real returns, losses, correlations, taxes, liquidity, and execution can differ.
This tool provides educational estimates only. It does not provide personalized investment advice.