# What is Yield? Is Yield the same as ROI? # What is Yield? How to calculate it?

Among all the concepts that we must learn when controlling our strategies, one of the fundamental ones is the yield.

The Yield is the benefit of a strategy or system expressed as a percentage, or what is the same, how many euros you earn for every €100 invested. For example, we can say that a strategy has a 10% yield, that is, that we have obtained a 10% profit from that strategy.

## How is the yield of a strategy calculated?

To calculate the yield, a very simple formula is used that consists of dividing the net profit by the total bet, multiplying the result by 100 and we already have our yield expressed as a percentage.

We are going to calculate the yield of a strategy in a very simple way. Let’s suppose that we have made 10 tickets at €5 each, all at odds 2 and we have won 6. The formula would be net profit / total wagered, or what is the same €10 profit / €50 wagered, gives a result of 0.2 that we are going to multiply by 100 and gives us a yield or benefit of 20%.

## Why is Yield important?

Knowing the yield of a strategy is essential to know the performance it has been giving since it began and what, therefore, we can expect from it in the future. We are going to propose two different scenarios so that you can understand the importance of yield:

• STRATEGY 1
• Bank –> 100
• Bet –> 300€
• Net benefits -> € 60
• STRATEGY 2
• Bank –> 10.000€
• Bet €30,000
• Net benefits -> € 4,000

With these data we clearly see that in total numbers strategy 2 has obtained much more money than strategy 1, but in terms of performance, benefit or yield strategy 1 has worked much better. STRATEGY 1 obtained a 20% yield and STRATEGY 2 a 13.3% yield.

Therefore, in terms of yield, STRATEGY 1 is 6.7% better than STRATEGY 2, and if it had the same bank, it would obtain much higher net profits.

This is fundamental when determining the quality of a strategy, since it is insufficient to say that a strategy is reporting €100 or €2,000, it is also very important to determine how much we are investing in order to obtain those benefits, and hence the relevance of the yield.

## What is the difference between yield and ROI?

Sometimes these two terms are confused but they do not indicate the same factor. We already know what yield is, so to differentiate it from ROI we must know that ROI is calculated by subtracting the initial amount of the bank from the total amount obtained, and dividing that result by the initial bank. We multiply the result by 100 and obtain the % of total ROI.

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