Positive Expected Value (+EV)
Positive expected value describes a decision whose probability weighted expected return is greater than its cost under the assumptions being used. It is commonly shortened to +EV.
Why it matters to you
Suppose a YES contract costs: $0.55 and pays: $1 if YES $0 if NO You estimate the probability of YES at: 65% Simplified expected value of the contract: (0.65 × $1) + (0.35 × $0) = $0.65 Estimated value: $0.65 Purchase price: $0.55 Estimated edge before fees and other costs: $0.10 per contract Under your assumptions, that is a positive expected value trade. But your estimate could still be wrong.
Terms that sit next to this one
Negative Expected Value
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