The Kelly formula or Kelly Criterion as it’s often known is a mathematical formula for working out the optimum amount of money to stake on a bet to maximise the growth of your funds. You can read more about how it works in this Kelly Criterion Wikipedia article.
Usually, the bigger your edge on the odds the more you should bet but Kelly also takes into account the real chance of that bet winning and Kelly would advise a smaller bet for a 5% edge at even money (2.0) than a 5% edge at 1/3 (1.33).
The actual formula for Kelly Staking is below:
((odds-1) * (percentage estimate)) – (1-percent estimate) / (odds-1) X 100
*Your percentage estimate must be expressed as a decimal e.g. 70% will be 0.7
E.g. – Odds of 1.58 with estimated 70% chance
= ((0.58*0.7 – (1-0.7)) / 0.58) x 100
= (0.106/0.58) x 100