The total amount of money set aside exclusively for betting or trading. Never money you can't afford to lose.
Your bankroll is the dedicated pool of capital for betting or prediction market trading. Proper bankroll management is arguably more important than edge identification — a great strategy with poor sizing still loses.
Key principles: never bet with money you need for living expenses. Size bets as a percentage of your bankroll (typically 1-5% per bet). Use the Kelly Criterion or a fractional Kelly approach to optimize growth.
Bankroll turnover — how many times you cycle through your bankroll — is a major driver of total profit, separate from edge per bet.
A formula for optimal bet sizing that maximizes long-term bankroll growth based on your edge and the odds.
VarianceThe natural fluctuation in results around your expected value. High variance means bigger swings even with an edge.
Expected Value (EV)The average profit or loss per bet if you made the same wager thousands of times. Positive EV means long-term profit.