Risk of Ruin Calculator

Updated

Having an edge does not stop you going broke — it only makes it less likely. Enter your edge and your bankroll in units and this works out the chance that variance takes everything before the math rescues you.

The short version

Your numbers

0.19%chance of ruin
Bankroll: $10,000

The formula, and what it assumes',

For a flat bet with edge e, standard deviation σ and bankroll B units, the chance of ever going broke is approximately:

e−2B·e/σ²

We use σ = 1.1322, which we computed by carrying the second moment through the same solver that produces our house-edge figures. How that was done.

Three assumptions worth knowing. The bet is flat — a counter varying their bet has a different and generally worse risk profile at the same average edge. The edge is constant, which it is not. And it models ruin over an unlimited number of hands, so it is a ceiling rather than a session figure.

If you do not have an edge

Then this calculator does not apply, and the honest answer is simpler: ruin is certain given enough hands. The only question is how long the bankroll lasts, and that is a division rather than a probability.

That is not a reason to avoid playing. It is a reason to decide the amount beforehand.

Keep reading

Risk of ruinthe full explanation Bankroll calculatorwork backwards instead Variancewhere the 1.13 comes from

By Martin Kosek · every number on this site is computed by us, not copied.

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