Convert a price into inverse probability and calculate a conditional return. Use two outcomes only when they cover the complete market.
Worked arithmetic
At 2.50, inverse probability is 40%. A stake of 10 returns 25 if the bet wins, including the 10 stake; profit is 15. With two prices at 1.90, the total inverse probability is 105.26%, an overround of 5.26 percentage points.
Limits of the calculation
Overround is not a guaranteed bookmaker profit or a forecast of your loss on one bet. Two prices taken at different times or with different completion rules should not be treated as a simultaneous market.
Try the numbers
The margin calculation assumes exactly two exhaustive outcomes. It is unsuitable if a draw or other outcome is missing.
