Definition
Edge is the probability advantage your estimate has over what the market has priced in. Edge = your estimated win probability − implied probability from the price. Expressed as a percentage. A 3% edge on a coin-flip market means you believe the true win probability is 53% while the market implies 50%. Edge erodes quickly as markets adjust — bets placed early capture more edge than identical bets placed at close. Sustainable edge requires models or information that the market systematically underweights.
Worked Example
Line: Under 47.5 at −110. Market implied probability: 52.38%. Your weather-adjusted and pace-adjusted model: 59% chance of under. Edge = 59% − 52.38% = 6.62%. EV per $110 bet = 6.62% × $100 = $6.62. Over 100 bets with same edge: +$662 expected profit before variance. If model is miscalibrated and true probability is only 53%: edge = 0.62%, barely worth betting.
Why It Matters
Edge is the only justification for placing a bet. Without measurable edge — from a model, from information advantage, or from a pricing inefficiency — every bet is negative EV after vig.