Removing the vig from a two-way market
The margin is not hidden. It is just spread across both prices so you never see it as a line item.
A venue that quotes both sides of a question quotes them so the implied probabilities add to more than one. That excess is the margin. Removing it gives you the price the market would show if it were pricing only the question.
The three words
- OverroundThe two implied probabilities added together. Two sides at −110 give 52.38% + 52.38% = 104.76%.
- Hold / vig / marginThe fraction of turnover the venue keeps if the book balances: (overround − 1) ÷ overround. Here, 4.76/104.76 = 4.55%.
- No-vig fair priceEach side divided by the overround. 52.38 ÷ 104.76 = 50%.
The proportional method, and its limit
Dividing each side by the total assumes the margin sits evenly on both sides. It is the standard approach, it is what our calculator uses, and it is close enough on markets near a coin-flip.
It gets less reliable the more lopsided the market. Favourite-longshot bias — the long-observed tendency for long shots to be priced worse than their true chance — means the margin usually sits heavier on the cheap side. Alternative de-vigging methods exist for that reason. On a 5¢ contract, treat any no-vig number as an estimate with a wide error bar.
On Polymarket the question changes shape
A binary Polymarket market is one token pair: YES and NO are two halves of the same dollar, so they sum to about 100¢ and there is no bookmaker margin in the quote. What you pay instead is the bid-ask spread and, if you are the taker, a fee determined by category. That fee is a real cost with a real formula — see how the fees work — but it is not vig, and calling it vig will make you compare the wrong numbers.
Questions
What is vig?
The venue's margin, built into both sides of a two-way price so that the implied probabilities sum to more than 100%.
How do you remove the vig?
Convert both sides to implied probability, add them, and divide each side by that sum. That is the proportional method.
Does Polymarket charge vig?
Not in the bookmaker sense. The two sides of a binary market are one token pair summing to about $1; the trading cost is the spread plus a category-based taker fee.