Quarter Kelly
In short: A bankroll management approach that stakes one-quarter of the bet size recommended by the Kelly Criterion formula. Reduces variance and drawdown risk at the cost of slower long-term growth — widely considered the practical default for serious sports bettors.
Also known as: 0.25 Kelly, fractional Kelly
Full Kelly bet sizing maximizes long-term bankroll growth but produces large swings — a 50% drawdown over a bad sample is normal even when the edge is real. Quarter Kelly cuts the recommended stake to 25% of the Kelly fraction, which roughly cuts drawdown variance to a quarter while still capturing the majority of long-term growth. Most bettors overestimate their edge, and Kelly assumes the estimate is correct — quarter Kelly hedges against this estimation error.