Three ways to write the same price
Every odds format answers one question: how much do I get back, and how much of that is profit? Decimal odds state the total return per unit staked, so 2.50 returns 2.50 for every 1.00 — a profit of 1.50. American odds split into positive and negative: +150 means a 100 stake returns 150 in profit, while -200 means you stake 200 to win 100. Fractional odds state profit against stake, so 3/2 means two units of profit for every three staked.
None of these formats is more accurate than the others. They are dialects. The practical skill is converting between them so you can compare two books that display prices differently.
Implied probability: the useful translation
Implied probability turns a price into a percentage, which is the only way to compare a bet against your own view. For decimal odds, divide 1 by the odds: 2.50 becomes 0.40, or 40%. For positive American odds, divide 100 by (odds + 100). For negative American odds, divide the absolute odds by (absolute odds + 100).
What implied probability does not do is tell you the true chance. It tells you the chance the price implies, including the operator's margin. A price of 2.50 does not mean an event has a 40% chance of happening; it means the book is offering you 40% worth of return.
Margin: why the two sides never add up to 100%
Add the implied probabilities of both sides of a two-way market and you will usually get more than 100%. That excess is the margin, sometimes called the overround or the vig. It is how the operator is paid, and it is the single number that separates a sharp book from an expensive one.
A market with a 4% margin is meaningfully better for a reader than the same market at 8%, before any view about the outcome is even considered. Two books can show the same headline price on the favourite and still differ substantially once you price the whole market.
Comparing two prices properly
Compare like with like. Convert both prices to decimal, then to implied probability, then subtract. A move from 1.91 to 2.00 is not cosmetic: it is the difference between 52.4% and 50.0% implied, and it changes the break-even rate you need to hit.
Then ask what else changed. A better price in a market with unclear settlement rules is not a better bet. Price and rule quality travel together.
Line movement and timing
Prices move because money arrives and because information arrives. A number that shortens has taken support; a number that drifts has met resistance or news. Neither direction tells you the result. What movement does tell you is that the market has absorbed something, which is worth understanding before you decide your own view is novel.
The habit that matters most
Price beats excitement. Comparing the price, the market definition and your own uncertainty — rather than betting a familiar team out of habit — is the difference between a considered decision and an expensive one.