Source: https://guthlabs.ai/docs/instruments/kelly-criterion-calculator/implementation/

instrument implementation / implementation-contract

# Kelly Criterion Calculator implementation

A source-bound implementation contract for Kelly Criterion Calculator; deployment and executable qualification remain separate.

Status: **VERIFIED_CLEAN**Lifecycle: **implementation-contract**

## Binding contract

This record describes what an executable surface must bind and validate. It does not claim that a public calculator, package, or production route is deployed.

**Record owner**: Guth Instruments

**Lifecycle**: verified-clean

**Evidence ID**: t4-236

**Effect**: Computation or source lookup only

## Input and validation requirements

- Division by zero occurs when b=0; require b>0.

- Require 0≤p≤1; probabilities outside this range are invalid.

- A negative Kelly fraction indicates a negative edge, but the spec does not say whether to display it, clamp the recommended stake to 0%, or interpret it as taking the opposing side.

- The formula can recommend more than 100% of bankroll when the modeled edge is large; leverage, maximum allocation, and shorting constraints are unspecified.

- Estimation error in p and b can materially change the result, so the output should not be presented as a reliable individualized investment or betting recommendation.

- Fees, commissions, spreads, taxes, slippage, ties, partial losses, and correlated positions are not represented.

## Required corrections

No binding erratum is attached to this unique-name record. Implementers must still preserve the declared units, domain, and failure behavior.

## Inspectable interface fixture

The sample below is evidence for interface and validation tests, not a production implementation.

````
{
  "inputs": {
    "win_probability": 0.55,
    "net_odds_b": 1.5
  },
  "expected_outputs": {
    "kelly_fraction_percent": 25,
    "half_kelly_percent": 12.5
  },
  "working": "q=1-p=1-0.55=0.45\nbp=1.5×0.55=0.825\nbp-q=0.825-0.45=0.375\nf*=0.375/1.5=0.25\nKelly percentage=0.25×100=25%\nHalf-Kelly=0.25/2=0.125=12.5%"
}
````

## Other records

[01**Overview**](<https://guthlabs.ai/docs/instruments/kelly-criterion-calculator/>)[02**Mechanism**](<https://guthlabs.ai/docs/instruments/kelly-criterion-calculator/mechanism/>)[04**Qualification**](<https://guthlabs.ai/docs/instruments/kelly-criterion-calculator/qualification/>)

## Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

- `VERIFIED_LEDGER.json`

- `evidence-tranche4/tranche4-results.json`