Direct Answer
Standard deviation is the square root of variance and the most intuitive measure of how spread out outcomes are. For a betting strategy it answers, 'how big are normal swings around the average?'
Key Takeaways
- 1 SD = ~68% of outcomes; 2 SD = ~95%.
- Bankroll scales with SD, not EV.
- Low-SD edges are more bankroll-efficient than high-SD ones.
Reading standard deviation
Roughly 68% of outcomes fall within one standard deviation of the mean; 95% within two. A strategy averaging $0 per bet with a $50 standard deviation produces $250+ swings (5 SD) routinely over thousands of bets.
Sizing for the standard deviation, not the mean
Bankroll requirements scale with standard deviation, not expected value. A small-edge / low-variance strategy can be more aggressive than a larger-edge / high-variance one.
Frequently asked questions
Is SD the same as risk?+
It is one component of risk. Correlation and tail outcomes matter too.
Educational only. Not wagering, financial, or legal advice. See our editorial policy.