Quote:
Originally Posted by Scotch78
Could somebody please tell me what the odds are of a 25 bet swing on 50/50 bets, and also what bankroll would be necessary to have a 0.001% risk of ruin?
Thank you,
Scott
If you have an advantage in the game, then you can compute your risk of ruin for playing indefinitely. That is, if you have 25 bets ( or buy-ins) , then the probability of busting with 25 bets is
(q/p)^25.
if p=51%, then the probability of busting is (.49/.51)^25 ~ 36.78%
If we know the win-rate and standard deviation of the coin flipping game, then the risk of ruin is
r = e^(-B*2*wr/s.d^2)
The s.d is approximately 1 for p close to 50%.
r= e^(-25*2*0.02/1^2)
r ~ 36.78% ( same as before )
If you wish to determine B with a ror of 0.001% for some p ,say p=51%
Then we use the same equation written in a different form
B = -s.d^2/(2*wr)*lnr
B = -1^2/(2*0.02)*ln(0.00001)
B ~ 287.82