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How safe are various starting bankroll levels?

Last updated: 07 Apr 09:00

The levels of risk are relative to the odds at which we bet. If someone had a 100 point bank when placing level stakes bets at 100/1, they’d be taking an extraordinarily high risk. With losing runs in excess of 200 almost certain, it wouldn’t take anything out of the ordinary to run out of money.

Conversely, if betting to level stakes at odds of 1.50 with a 100 point bank, the risk levels are exponentially lower.

Therefore, with regards to level stakes betting, no one can categorically tell you what the risk levels are without factoring in the odds range of the bets. As we tend to bet across a range of odds, calculating a ‘safe level’ is difficult.

Staking Options:

There are fundamentally three ways in which you may choose to stake your bets:

  1. Level stake
  2. Percentage stakes
  3. Variable stakes

What are the advantages and disadvantages of each?

Level stakes:

Advantages: Calculating the stake is easy; we place the same amount on each bet.

Disadvantages: Establishing a safe bankroll size (as explained) is difficult as it has to reflect the odds range we’re betting in.

Percentage stakes:

Staking a percentage of our bankroll on each bet is an approach that many people seem to find appealing.

bankroll 1

Using a £1,000 bankroll, if we were to stake 1% of our bankroll on the first bet placed, we would risk £10. Should we opt to stake 2% on each bet, we would place £20 on the first bet. Placing 5% on the first bet would give a stake of £50.00.

From here on, our stakes would adjust depending on whether our bankroll grows or shrinks. If we staked £20 (2%) on the first bet and it won at 5/1, our bankroll would then be £1,100. The stake for our next bet would be £22 which is 2% of £1,100.

The logic behind this approach is that if the first bet wins we have more money in our bank, we can then afford to invest slightly more on the next bet. Had our first bet of £20 lost, the bankroll would have dropped to £980. The stake for the next bet would reduce to £19.60.

The downside to percentage stakes betting is very similar to level stakes betting. Betting a fixed percentage of the total amount of the bankroll takes no account of the risk (odds) involved. Should we place ten bets at odds of 10/1, it is fairly probable that we could back ten losers. Given this scenario, staking 2% of our bankroll would see our £1,000 bank quickly tumble to £834.

bankroll 2

After just 10 bets our funds would have dropped by a rather large 18.29%.

The risks when staking 2% of the bankroll on bets at 10/1 are extremely high. The risks when betting 2% of the bankroll at odds of 1.50, would be considerably lower. This staking method doesn’t handle risk very well at all.

Variable stakes:

There are two different ways in which variable stakes can be operated:

  1. We aim to win a fixed amount from each bet,
  2. We aim to return a fixed amount from each bet.

At first glance, there may not seem to be much difference between the two but on closer inspection, you’ll find there is.

The table below shows how much we would need to stake in order to win £100 at various prices.

bankroll 3

By staking this way, when we bet at 5.00 (4/1), we’re acknowledging that we’re less likely to win than when betting at shorter odds, so we risk a smaller part of our bankroll. When betting at 1.33 (1/3), we’re less likely to hit a long losing run so we’re able to stake a larger proportion of our bankroll. This makes sense as we’re acknowledging the relationship between win rates, odds and risk.

This approach works reasonably well if you don’t bet odds on. When betting odds on, the stakes for the odds on bets quickly jumps to very high levels, as the table shows. Should you place a bet at 1.10, your stake to win £100 would be £1,000.

One of the fundamental betting principles is that you should never be taken out of your comfort zone with your staking methods. Staking £100 on an even money chance may be okay for most people, but I don’t think staking £1,000 on a very short-priced bet would help most of us sleep easily on the night before the match!

Table 2:

Betting to return a set amount from each bet removes this weakness. I believe this is the better of the two variable stakes options:

bankroll 4

The stakes stay within a much more confined range. Even with long odds on bets, our stake is always going to be less than £100. This approach works equally well across all odds. Notice how the stake in Table 1 ranges from £25 to £303.03, whereas in Table 2 the range is from £20 to £75.19.

In table two, the risks we are taking are directly in proportion to the odds on offer. When betting to win £100, the stakes are still somewhat disproportionate to the risk.

In terms of managing risk, this staking method is by far the most effective.

The next table expands on table two.

Table 3:

bankroll 5

When aiming to return a set amount from each bet, the amount won isn’t a constant. It varies depending on the odds of the bets.

The table shows a limited number of prices. To calculate the stake for any price, take 100 and divide it by the decimal odds for the outcome. For example: 100 divided by 3.50 = £28.57.

Mike Lindley

www.winabobatoo.co.uk

Author:

Teemu Maarela

Esports & Ice Hockey Specialist

Bio:

Teemu is an enthusiastic Finn who spent his childhood around ice hockey and video games, and he has 10+ years of experience with sports betting industry. Teemu specialises in analysing esports and ice hockey games. He contributes to Betting.com website in English, writing about his two passions - ice hockey and esports.
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