The Kelly optimization model, often called the optimal growth strategy, is based on the concept that if you know the probability of success, you bet the fraction of your bankroll that maximizes the growth rate. It is expressed as a formula: 2p − 1 = x where 2 times the probability of winning (p) minus 1 equals the percentage of your total bankroll that you should bet (x). For example, if the probability of beating the house is 55 percent, you should bet 10 percent of your bankroll to achieve maximum growth of your winnings. If the probability is 70 percent, bet 40 percent. And if you know the
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