You should think about the type of investor that you are. Are you aggressive or conservative? Are you experienced or a novice? The answers to these questions will help you to determine the size of your typical bet. This is called your betting unit size.
We typically recommend that a sports investor bet 1%-3% of their bankroll on each bet. Conservative sports investors (or beginners) should bet 1%-2% on a play. Note that professional’s betting unit sizes are normally in the 1% range.
Aggressive sports investors might want to bet 3% on a play. Two-percent is a good medium and it allows you to withstand a losing streak while helping to build up your sports investing bankroll. Very aggressive investors might bet 4% or 5% of their bankroll per wager, but this is too risky for most investors.
Why not 4% or 5%?
If you bet amounts that are too large, a bad streak could cut your bankroll in half (or worse). You then might feel like you need to reduce your betting unit size just before the inevitable hot streak. Smaller bet sizes are more prudent and allow you to stick to your approach and stay disciplined.
True Bankroll and Risk Capital
Whenever we talk about percentages of bankroll, most casual bettors feel that they are on the high end of the ranges we discuss. This might seem true, but only because the true bankroll for most casual bettors is higher than what they have in their accounts.
For example, many bettors might have $X in their accounts, but are willing to add another $Y if they draw down their account. Professionals already know their full bankroll and need to preserve their capital versus risk of ruin.
Investors, and in this case sports investors, need to understand the level of their true bankroll or risk capital (allocated to sports). Once investors take a serious look at their finances, they might better understand the true level or amount they allocate to sports investing.
This can help explain that 1%-2% of their bankroll is a realistic betting unit size.