Is the cash-out offer fair?
Compare the offer with the probability-weighted value of the return still at risk. An offer below that figure gives up value under your assumptions. An offer above it is favourable under those same assumptions. Neither result predicts what will happen next.
| Measure | Calculation | What it tells you |
|---|---|---|
| Fair value | Potential total return × fair probability | The probability-weighted value of holding the bet. |
| Offer shortfall | Fair value − cash-out offer | How much value the offer gives up under your estimate. |
| Value retained | Cash-out offer ÷ fair value × 100 | The percentage of estimated fair value included in the offer. |
A worked cash-out example
Suppose a bet can return £200 and you estimate that it now has a 60% chance of winning. Its probability-weighted fair value is £120. A £109.60 offer is £10.40 below that figure and retains 91.3% of the estimated fair value.
| Potential return | Fair probability | Fair value | Offer | Value retained |
|---|---|---|---|---|
| £200.00 | 60% | £120.00 | £109.60 | 91.3% |
How to estimate the probability
The probability is the most important input and the easiest one to overstate. Current market odds can provide a starting point, but a bookmaker price includes margin. For a market with mutually exclusive outcomes, convert every current decimal price into implied probability, add the percentages and divide each one by that total. That proportional adjustment removes the displayed overround rather than treating one price in isolation.
For example, decimal prices of 1.80 and 2.20 imply 55.56% and 45.45%. Together they total 101.01%. Dividing each figure by that total produces margin-adjusted estimates of 55.0% and 45.0%. This is still a market estimate, not a fact, and a draw, push, commission or mismatched settlement rule can make a two-outcome comparison invalid.
The probability range shows how sensitive the answer is when your estimate is uncertain. The partial result splits the current offer and potential return proportionally. The hedge illustration assumes exactly two exhaustive outcomes with matching settlement rules and sufficient liquidity.
A precise calculation cannot repair an optimistic estimate or make a bet safe. Compare the arithmetic, then make any decision within an affordable betting limit.