We traded out of ** Alexco Resources** last summer when it became fully valued at U.S. $2.43. Shares now trade at a 50% discount to our estimate of True Value. We’d like to re-enter, but are the odds in our favor? Let’s find out.

Price | Odds of Winning | Probability of Winning |

2.78 | 1.50 | 67% |

3.30 | 4.00 | 25% |

4.13 | 4.00 | 25% |

7.58 | 12.50 | 8% |

According to the ** Odds Engine**, we have one price point at which our estimation of true value intersects approximately with favorable odds: $2.78.

**Next Steps**

We have determined that there *is *a trade with favorable odds on the table, but how much should we wager?

We rely on a 1/8 Kelly Criterion betting system in order to determine exactly how much to wager relative to available cash.

**Here is the formula:**

`=(((PAYOUT*PROBABILITY OF WINNING)-PROBABILITY OF LOSING)/PAYOUT)/8`

We know the probability of winning, but in order to execute the formula, we need the Odds Engine to tell us the probability of losing, as well.

**Here are the results:**

Price | Probability of Winning | Probability of Losing | Payout |

2.78 | 67% | 58% | $2 |

Utilizing the 1/8 Kelly Criterion formula, we are advised to bet no more than 3% of available cash on Alexco Resources.

**Conclusion**

We have discovered a value bet with good odds. If $AXU drops to $0.51 in the ongoing crash, representing a 79% discount, we’d wager. But not until then.