Understanding how Skepsis calculates odds will help you spot value and make better predictions.
The Basics
Probability → Odds
Skepsis displays both probability and odds for every range:
| Probability | Odds (Multiplier) | What It Means |
|---|
| 50% | 2x | Coin flip, double your money |
| 25% | 4x | Underdog, 4x payout |
| 10% | 10x | Long shot, 10x payout |
| 5% | 20x | Very unlikely, 20x payout |
Odds = 1 / Probability
Example:
- Range probability: 25%
- Odds = 1 / 0.25 = 4x
- $100 bet → $400 payout if correct
Reading the Probability Distribution
When you open a market, you see a probability curve that represents the crowd’s consensus.
What the Shape Tells You
| Shape | Meaning | Opportunity |
|---|
| Tall narrow peak | High confidence in specific range | Low odds in center, good odds on edges |
| Wide flat | Uncertainty | Similar odds everywhere |
| Two peaks | Market disagrees with itself | Pick a side for better odds |
| Long tail | Some believe in extreme outcome | High-risk, high-reward tail bets |
Understanding Your Quote
When you select a range and amount, you get a quote:
Breaking It Down
Return (Odds)
Your multiplier if you win.
Return = Total Payout / Your Bet
2.0x = $200 / $100
Win Probability
The market’s current estimate of your range winning.
Probability = 1 / Return
50% = 1 / 2.0
If You Win
The total amount you receive (your initial bet + profit).
Payout = Bet × Return
$200 = $100 × 2.0
Finding Value
Value exists when you think the true probability is higher than the market’s implied probability.
Example: Spotting Value
Market shows: Range $96K-$97K at 20% probability (5x odds)
You believe: Based on your analysis, true probability is 30%
Expected Value calculation:
- EV = (Your prob × Payout) - Investment
- EV = (0.30 × $500) - $100
- EV = $150 - $100 = +$50
This is a +EV bet! The market is mispricing this range.
When to Bet
| Your Belief vs Market | Action |
|---|
| Your prob > Market prob | ✅ Bet (you have edge) |
| Your prob = Market prob | ⚖️ Neutral (no edge) |
| Your prob < Market prob | ❌ Don’t bet (negative edge) |
How Odds Change
Skepsis uses LMSR (Logarithmic Market Scoring Rule) which means:
After Someone Bets on a Range:
- That range’s probability increases
- That range’s odds decrease (less payout per dollar)
- Other ranges’ probabilities decrease
- Other ranges’ odds increase (more payout per dollar)
Example: Price Movement
Before Alice's $500 bet on $96K-$97K:
- $96K-$97K: 20% prob, 5x odds
- $97K-$98K: 25% prob, 4x odds
After Alice's bet:
- $96K-$97K: 28% prob, 3.6x odds ← Probability up, odds down
- $97K-$98K: 22% prob, 4.5x odds ← Probability down, odds up
What This Means for You
- Bet early if you have a view — you get better odds
- Bet against the crowd — unpopular ranges have better odds
- Watch for overreaction — big bets can create value elsewhere
Comparing Odds Across Markets
Different markets have different liquidity, which affects spreads.
High Liquidity Market
Range $96K-$97K:
- Buy price: $0.31 per share
- Sell price: $0.29 per share
- Spread: 6.5%
Low Liquidity Market
Range $96K-$97K:
- Buy price: $0.35 per share
- Sell price: $0.22 per share
- Spread: 37%
Low liquidity = wider spreads. You pay more to enter and get less when exiting. Prefer high-liquidity markets when possible.
Odds vs Expected Value
High odds ≠ good bet. What matters is expected value.
The Math
Expected Value (EV) = (Probability × Payout) - Cost
Good bet: EV > 0
Bad bet: EV < 0
Comparing Bets
| Bet | Odds | Your Est. Prob | EV per $100 |
|---|
| A | 2x | 60% | +$20 ✅ |
| B | 10x | 8% | -$20 ❌ |
| C | 5x | 25% | +$25 ✅ |
| D | 20x | 5% | $0 ⚖️ |
Quick Probability-to-Odds Table
| Probability | Odds | $100 Payout |
|---|
| 80% | 1.25x | $125 |
| 50% | 2x | $200 |
| 33% | 3x | $300 |
| 25% | 4x | $400 |
| 20% | 5x | $500 |
| 10% | 10x | $1,000 |
| 5% | 20x | $2,000 |
| 2% | 50x | $5,000 |
| 1% | 100x | $10,000 |
Deterministic Payouts: The Skepsis Advantage
Unlike traditional betting where payouts can change:
Traditional Betting
You bet at 5x odds
More people bet the same
Final payout: 3x (reduced!)
Skepsis
You bet at 5x odds
More people bet the same
Your payout: Still 5x (locked in!)
Next Steps
