R/kelly_bet.R

In papagorgio23/bettoR: Sports Betting Tools

#' @title Kelly Criterion Bet Size
#'
#' @description This function calculates the Kelly Criterion and returns the dollar amount to bet in order to maximize returns.
#'
#' @param unit_size Unit size of your bankroll, typically 1% of bankroll (100)
#' @param win_prob Probability of winning a bet (0.55)
#' @param odds Odds for a bet (-110)
#' @param type Type of odds. Possible values are:
#' * `us`, American Odds
#' * `dec`, Decimal Odds
#' * `frac`, Fractional Odds
#' @param kelly_type Optional input altering the Kelly formula. Possible values are:
#' * `half`, Half Kelly
#' * `quarter`, Quarter Kelly
#' * `eighth`, Eighth Kelly
#'
#' @return Percentage of bankroll to risk on bet
#'
#' @examples kelly_bet(
#'   unit_size = 100,
#'   win_prob = 0.58,
#'   odds = -132,
#'   type = "us"
#' )
#' @examples kelly_bet(
#'   unit_size = 50,
#'   win_prob = 0.53,
#'   odds = -105,
#'   type = "us",
#'   kelly_type = "Half"
#' )
#' @examples kelly_bet(
#'   unit_size = 500,
#'   win_prob = 0.545,
#'   odds = 2.1,
#'   type = "dec"
#' )
#' @examples kelly_bet(
#'   unit_size = 300,
#'   win_prob = 0.27,
#'   odds = 5.5,
#'   type = "dec",
#'   kelly_type = "Quarter"
#' )
#' @examples kelly_bet(
#'   unit_size = 250,
#'   win_prob = 0.10,
#'   odds = 40/1,
#'   type = "frac"
#' )
#'
#' @references [https://en.wikipedia.org/wiki/Kelly_criterion](https://en.wikipedia.org/wiki/Kelly_criterion)
#'
#' @export
kelly_bet <-
  function(unit_size,
           win_prob,
           odds,
           type = "dec",
           kelly_type = "full") {
    ## Error handling
    if (!is.numeric(unit_size)) {
      stop("Unit size must be numeric")
    }
    if (!is.numeric(win_prob)) {
      stop("Win Probability must be numeric")
    }
    if (win_prob < 0 | win_prob > 1) {
      stop("Win Probability must be between 0-1")
    }
    if (!is.numeric(odds)) {
      stop("Odds must be numeric")
    }
    if (!type %in% c("us", "frac", "dec")) {
      stop("type must be either: ('us', 'dec', 'frac')")
    }

    # Convert to fractional odds for the equation
    odds <-
      as.numeric(convert_odds(odds, input = type, output = "frac"))

    # Kelly Criterion equation
    kelly <- round(((odds * win_prob) - (1 - win_prob)) / odds, 4)

    if (kelly_type == "half") {
      kelly <- round(kelly / 2, 4)
    }

    if (kelly_type == "quarter") {
      kelly <- round(kelly / 4, 4)
    }

    if (kelly_type == "eighth") {
      kelly <- round(kelly / 8, 4)
    }

    bet_size <- round(kelly * unit_size * 100)

    return(bet_size)
  }