Bankroll

Your bankroll is the total amount of money dedicated specifically to betting. It's separate from living expenses, savings, or other funds. Proper bankroll management is arguably more important than picking winners.

Setting Your Bankroll

Your bankroll should be:

Completely separate: Money you can afford to lose entirely without affecting your life.

Large enough for variance: At least 50-100 units to survive normal losing streaks.

Tracked independently: Not mixed with other accounts or spending.

Starting Bankroll	Unit Size (1%)	Variance Buffer
$1,000	$10	Tight (high risk of ruin)
$5,000	$50	Moderate
$10,000	$100	Comfortable
$25,000+	$250+	Professional level

The Math of Ruin

Even with positive edge, small bankrolls face "risk of ruin"—the probability of going broke before variance normalizes.

At 1% unit sizing with 3% edge:

• 25-unit bankroll: ~15% chance of ruin
• 50-unit bankroll: ~4% chance of ruin
• 100-unit bankroll: <1% chance of ruin

More bankroll = more survival = more time to realize edge.

Bankroll Growth

Winning bettors face a choice:

Fixed units: Always bet $100 regardless of bankroll changes. Slower growth, lower risk.

Proportional units: Always bet 1% of current bankroll. Faster growth, higher variance.

Kelly Criterion: Bet proportionally to edge. Mathematically optimal for growth.

Most professionals use fractional Kelly (half or quarter) to balance growth and safety.

Bankroll Leaks

Common ways bettors destroy bankrolls:

Leak	Impact
Chasing losses	Increasing size after losses accelerates ruin
Oversizing	Betting 5-10% per game invites variance death
Tilt	Emotional betting after bad beats
Mixing funds	Betting rent money
Parlays	High-vig bets compound losses

Separate Accounts

Professional bettors often maintain:

• Main bankroll: Primary betting capital
• Withdrawal buffer: Profits pulled out regularly
• Reserve: Emergency funds if bankroll needs replenishing

This structure protects against catastrophic loss and enforces profit-taking discipline.

Bankroll in Prediction Markets

On Kalshi, the same principles apply:

• Deposit what you can afford to lose
• Size positions as percentage of account
• Track P&L separately from other finances

Prediction market volatility can be even higher than sports betting, making bankroll discipline crucial.

Related Terms

• Unit — Standard bet size derived from bankroll
• Kelly Criterion — Optimal sizing relative to bankroll
• Variance — Why bankroll size matters
• Tilt — Emotional state that destroys bankrolls