The Hedge Calculator starts from the market odds, spread, capital, and desired profit target, then derives the hedge sell and buy prices, allocates the capital across both sides, and shows the payout/profit if both orders are matched.
This hedge calculator is built for exchanges and prediction markets such as Polymarket. Enter an outcome's market odds, the spread, your capital and a profit target, and it prices a sell position and a buy position on either side of the market so that, if both fill, you get the same payout whichever outcome wins.
It starts from the market price, removes half the spread from each side to find fair probabilities, then shades both sides by your profit target:
Sell probability = 1 ÷ market odds
Buy probability = 1 + spread − sell probability
Fair probability = each probability − spread ÷ 2
Quoted probability = fair probability ÷ (1 + profit %)
Stake on each side = capital × quoted probability ÷ sum of quoted probabilities
Payout = capital ÷ sum of quoted probabilitiesSell odds are 1 ÷ the quoted sell probability. Buy odds are shown after the same conversion as the buy odds converter, so they read like the odds of the outcome itself.
Market odds 2.00, a 0.01 spread, $100 of capital and a 2% profit target:
| Position | Odds | Stake |
|---|---|---|
| Sell | 2.06 | $49.50 |
| Buy | 1.94 | $50.50 |
If both positions fill, the payout is $102.00 whichever outcome wins: a $2.00 profit on $100.
Yes. Quote orders in the OddsFantasy terminal place both sides of a market to target the spread, calculating the quote levels and stake split from your capital and target profit, the same way this calculator does.
Both quotes are shaded from the fair price by your profit target. If the target is large relative to the spread and the market price, one of the quoted probabilities falls to zero or below and no valid hedge exists.
The smallest step a price can move. The calculator reads it from the spread you enter: a 0.01 spread implies a 0.01 tick size.