Implied probability
The probability a price implies if it were fair: 1 / decimal odds, or the contract price for a prediction market that pays $1.
American −150 is decimal 1.667, implied 60%. Prediction-market contracts are already probabilities: YES at 62¢ implies 62%. Because books add vig, the implied probabilities across all outcomes exceed 100%; removing the vig gives the book's true estimate.
Arbitrage is just implied probabilities summing to less than 100% across venues. Converting every price to this common unit is the first thing ArbMonster's engine does before comparing venues and subtracting fees.
Measured on ArbMonster: Odds converter
Related terms: American odds · Decimal odds · Vig · No-vig odds