Expected value and the minimum price
A forecast becomes a priced decision only after probability, obtainable odds and uncertainty are considered together.
Expected value is an estimate
For a one-unit decision at decimal odds, a simplified expected value is model probability multiplied by odds, minus one. A 58% estimate at 1.80 produces a theoretical value of about +4.4% before practical frictions.
That number inherits every weakness in the probability estimate. It is not realised profit and it does not mean the next selection is likely to return 4.4%.
Minimum price creates a safety boundary
The mathematical break-even price is 1 divided by estimated probability. A robust publication rule should require a buffer above that point for model error, stale prices and unavailable execution.
FORM/PRICE therefore treats minimum acceptable price as part of the selection record. If the price falls below it, the original analysis may still be informative but the priced decision no longer passes.
Probability floor and edge floor are different
A high-probability outcome can be overpriced, while a lower-probability outcome can have positive estimated value. Product rules should expose both dimensions instead of optimizing one and hiding the other.
- Probability addresses likelihood.
- Edge addresses price relative to likelihood.
- Uncertainty determines how much evidence is required.
Sources
Direct links are preserved so the editorial reasoning can be checked independently.