ROI

Short Definition:

Also Known As: Return on Investment - the raw percent relationship between how much you have risked (invested) and how much you have returned.

Long Definition:

Return on Investment, or ROI, is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.

To calculate ROI, the return of an investment is divided by the cost of the investment. The result is expressed as a percentage. The formula for ROI is:

ROI=(Net Profit / Cost of Investment)×100

In sports betting, a positive ROI means that you are making money over a given period, whereas a negative ROI means you are losing money. It's important to note that ROI can be influenced by various factors, such as the odds of the bets placed, the type of bets, and the betting strategy employed.

When evaluating ROI in any context, it's critical to consider the risk associated with the investment, the time period over which the return was generated, and the potential for variability in returns. In betting, as in other forms of investment, a higher ROI is typically associated with higher risk. Traditionally, the top handicappers in basketball win about 55-57% of their bets. In order to be profitable at a -110 average odds, you need to win 52.38% of your bets. Let's do a bit of math: 55% win rate means 55 - 45 over a 100 bet span. Thats 55u - (45 * 1.1) = 5.5u won every 100 bets at 55%. Now you have invested 100 * 1.1u because you are playing at -110. So your ROI is 5.5 / 110 = 5% 57% win rate: 57-43 -> +9.7u every 100 bets 9.7 / 110 = 8.8% So at 55% win rate playing -110 odd bets, you will win 0.05x every dollar you risk, or $5 for every $100 you risk over time. Changing the odds to -120 makes it much tougher because you multiply losses by 1.2u in stead of 1.1u. The break even rate for -120 is 54.55%, -130 is 56.52% and so on. The steeper the odds, the more you must win to profit. Long term, any positive ROI means you are winning. In terms of understanding what is good, or great, a 5% ROI is great. A 3% ROI is good. and anything above 8% ROI on a reliable scale is difficult to find and should be treasured.

Technical Definition: