Construct · 1 fields · 2 citations

bankroll management: a standalone construct

One name. One construct. A landmark on the map.

● anchor · one construct, one field Nearest construct by meaning·not indexed
bankrollmanagement1 CONSTRUCTBankroll managementKELLY · 1956

A single standalone construct; nearby constructs are located against it in the Collider. Tap a field for its definition, unit, and measures.

Gambling and probability

sizing wagers relative to the money a gambler can afford to risk, so ordinary swings do not exhaust the stake.

Bankroll management is the discipline of sizing wagers relative to the money a gambler can afford to risk, so that ordinary swings do not exhaust the stake before an edge can play out. Even a positive-expectation bettor faces a real risk of ruin if bets are too large relative to the bankroll; Kelly’s 1956 A new interpretation of information rate derived the growth-optimal fraction of a bankroll to stake given one’s edge, and Epstein’s The theory of gambling and statistical logic places it within the wider theory of gambling. The referent is the rule linking bet size to bankroll that balances growth against the probability of going broke.[1][2]

Unit
The fraction of a bankroll staked per bet, set against risk of ruin
Recovery means
Not applicable
Measured by
Guided by edge, odds, and bankroll via the Kelly fraction and the resulting risk of ruin

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Nearby constructs

favorite-longshot bias2 fields · 3 citationsinvariant · one bias, many betting marketsKelly criterion3 fields · 3 citationsinvariant · one construct, three systemsdiscipline4 fields · 5 citationsjingle · one word, four constructs

References

  1. Kelly, J. L. (1956). A new interpretation of information rate. The Bell System Technical Journal, 35(4), 917–926. https://doi.org/10.1002/j.1538-7305.1956.tb03809.x
  2. Epstein, R. A. (2009). The theory of gambling and statistical logic (2nd ed.). Academic Press. ISBN 9780123749406

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