How to Calculate Arbitrage Stakes in 2026: The Formula, Three Worked Examples and the Fee Math

The quick answer

• The test: convert every price to decimal odds and add up 1 divided by each. Call that S. Below 1, the arb exists before fees.

• The stake on each outcome: total stake divided by (that outcome's decimal odds x S).

• Your return: 1/S - 1 on the total staked. 1 - S understates it.

• Rounding: round to the cent if the venue allows it. Whole-dollar rounding can give away almost half the profit on a small arb.

• Fees: a per-contract fee on one leg comes straight off the locked profit. On a $200 two-way arb below, a pre-game straight trade on Novig costs nothing, while a Kalshi or Polymarket US taker fee takes about $3.60 of a $7.00 profit.

An arbitrage calculator runs three lines of arithmetic. Knowing them lets you check a scanner's number before you place money and see where fees and rounding leak out of a locked-looking position.

What the formula does

An arbitrage covers every outcome of one market at prices that together return more than they cost. The stakes are sized so that every outcome pays back the same amount. With decimal odds d1, d2 and so on, and a total stake B:

• S = 1/d1 + 1/d2 + ... + 1/dn

• Stake on outcome i = B / (di x S)

• Payout whichever outcome wins = B / S

• Return on total stake = 1/S - 1

How we checked

The formulas are standard arithmetic and every example below is recomputed to the cent. Fee figures come from each venue's own published schedule, checked on 7 October 2026. Kalshi's schedule is the version effective 7 July 2026. The prices in the examples are illustrative and aren't quoted from any venue.

Step 1: convert the odds to decimal

Decimal odds are the total payout per $1 staked, including the stake.

• Positive American odds: 1 + odds/100. So +110 is 2.10 and +250 is 3.50.

• Negative American odds: 1 + 100/|odds|. So -110 is 1.9091 and -105 is 1.9524.

• Prediction market price in cents: 1 / price. A 49c contract pays $1, so it's 2.0408.

Step 2: add up the implied probabilities

Take two exhaustive outcomes at +110 and +105, which are 2.10 and 2.05 in decimal.

• 1/2.10 = 0.47619

• 1/2.05 = 0.48780

• S = 0.96400

S is under 1, so the arb exists before fees.

Step 3: size each stake

With $200 in total:

• Stake on the 2.10 side: 200 / (2.10 x 0.96400) = $98.80

• Stake on the 2.05 side: 200 / (2.05 x 0.96400) = $101.20

• Total: $98.80 + $101.20 = $200.00

If the 2.10 side wins, $98.80 x 2.10 = $207.48 comes back, a profit of $7.48. If the 2.05 side wins, $101.20 x 2.05 = $207.46, a profit of $7.46. The two-cent gap is rounding.

Why 1 - S is not your return

1 - S here is 3.60%. Some guides call that the arb margin, and on $200 it would mean a $7.20 profit. The position above makes $7.46 to $7.48.

1 - S is profit as a share of the payout. Your return is profit as a share of what you staked, which is 1/S - 1, or 1/0.96400 - 1 = 3.73%. On $200 that's $7.47, which matches the stakes once the rounding is averaged out. The difference is small on a thin arb and grows as S falls, so a scanner that reports 1 - S is understating every opportunity it shows.

A three-way soccer example

A soccer match result has three outcomes, so all three need covering. Say home is +145, the draw +250 and away +240, each at a different venue.

S is 0.98800, so the return is 1/0.98800 - 1 = 1.215%. On $500:

• Home: 500 / (2.45 x 0.98800) = $206.56, which returns $506.07

• Draw: 500 / (3.50 x 0.98800) = $144.59, which returns $506.06

• Away: 500 / (3.40 x 0.98800) = $148.85, which returns $506.09

• Total staked: $206.56 + $144.59 + $148.85 = $500.00

The locked profit is $6.06, the worst of the three outcomes. Before placing any leg, confirm all three venues settle the match on the same period. A draw graded on regular time at one venue and an away win graded after extra time at another is not a covered position.

Rounding stakes

Whole-dollar stakes are easier to place, but it's the worst outcome you lock in, so rounding has to be checked against all three.

• Rounding each stake to the nearest dollar ($207, $145, $148) returns $507.15, $507.50 and $503.20. Locked profit: $3.20.

• Rebalancing to $206, $145 and $149 returns $504.70, $507.50 and $506.60. Locked profit: $4.70.

• Staking to the cent locks in $6.06.

Plain rounding gave away almost half the profit. Where a venue trades whole contracts, round the contract count and recompute the dollar amount from it.

How fees change the math

A fee charged on one leg comes off the locked profit on every outcome. Kalshi, Polymarket US and Novig all price taker fees per contract with a version of coefficient x contracts x price x (1 - price), which is largest at 50c and shrinks toward either end.

Suppose one side is +110 (2.10) at a sportsbook and the other is 49c (2.0408) on a prediction market. S = 0.47619 + 0.49 = 0.96619, a 3.50% return before fees. On $200:

• Sportsbook leg: $98.57 at 2.10 returns $207.00.

• Prediction market leg: 207 contracts at 49c costs $101.43 and returns $207.00.

• Total staked $200.00. Profit before fees: $7.00 either way.

The fee on the 207-contract leg, by venue:

Kalshi's taker formula is 0.07 x contracts x price x (1 - price): 0.07 x 207 x 0.49 x 0.51 = $3.62. Polymarket US uses a 0.0695 coefficient for takers and pays makers a 0.0125 rebate on the same formula. Polymarket US changed some fees again on 7 October 2026, so check its current schedule before relying on these figures. Novig charges takers 0.03 on live straights and nothing to either side on a pre-game straight trade.

On a taker fill at Kalshi or Polymarket US, a 3.50% arb becomes about a 1.7% arb, and with that leg priced near 50c, an arb under about 1.8% before fees turns negative. Polymarket US's maker rebate is the one structure that adds to the profit, but a resting order only fills if someone takes it, and an unfilled leg leaves the other one exposed.

To fold a fee into the S test before placing anything, add the per-contract fee to the price. At Kalshi, a 49c contract effectively costs 49c + 1.75c = 50.75c, so S becomes 0.47619 + 0.50749 = 0.98368.

Where the calculation still breaks

The formula assumes both legs fill at the quoted price and settle on the same rules. A partial fill on a prediction market or a reduced stake at a sportsbook leaves the filled leg uncovered, with its full stake at risk. Settlement rules on voids, overtime and withdrawn players differ between venues, and any difference can leave one leg paid and the other refunded.

What to look for

• Return figure: check whether a scanner reports 1 - S or 1/S - 1 before comparing opportunities.

• Rounding unit: find out whether each venue takes cents, whole dollars or whole contracts, and recompute the worst outcome after rounding.

• Fee schedule: price the fee on every leg at the contract price you'll actually get.

• Pre-game or live: a venue's fee can change once play starts, so price the leg for when you'll place it.

• Settlement period: confirm every leg grades on the same period and handles voids the same way.

Frequently asked questions

What tools do I need to start arbitrage betting?

A calculator or spreadsheet that runs the three formulas above, funded accounts at two or more venues, and each venue's fee schedule and settlement rules. A scanner finds candidates faster, but its percentages still need checking against your own math.

What are the best platforms for arbitrage betting?

The ones that leave the most of the edge after fees. A pre-game straight trade on Novig carries no fee for either side, so taking the price keeps the whole edge. Kalshi and Polymarket US charge takers about $1.75 per 100 contracts at even money, and a resting Polymarket US order earns a rebate if someone fills it.

What is the formula for arbitrage stakes?

Stake on each outcome = total stake / (decimal odds x S), where S is the sum of 1 divided by each decimal price. Every outcome then pays the total stake divided by S.

Is 1 - S the same as my arbitrage profit?

No. 1 - S is profit as a share of the payout. Your return on stake is 1/S - 1, which is always higher, and the gap widens as S falls.

How do fees affect arbitrage?

A per-contract fee comes straight off the locked profit. On the $200 example above, a Kalshi taker fee cuts a $7.00 profit to $3.38, while a leg with no fee leaves it at $7.00.

Sources

All checked 7 October 2026 except where noted.

• Novig fee schedule: support.novig.com/en/articles/16195057-fees-on-novig

• Novig CFTC designation: cftc.gov, Ludlow Exchange, LLC, filing 59390, designated 16 June 2026

• Kalshi fee schedule: kalshi.com/docs/kalshi-fee-schedule.pdf, last updated and effective 7 July 2026; checked 7 October 2026

• Polymarket US fee schedule: docs.polymarket.us/fees, effective 1 October 2026, with a further change on 7 October 2026