Every time a bettor places a bet, he or she stakes a % of their bankroll, the size of which may or may not vary, according to their preferences and predetermined ideas. Using smaller fixed stakes involves less risk of losing the bankroll entirely. For a successful bettor the chances of ever losing it entirely are diminished. For a bettor without a unit size, the misfortune of losing will unfortunately be unavoidable, but it will not come around as quickly. In terms of growing the bankroll, smaller stakes will naturally contribute smaller profits, but more stable growth.
The larger the size of the betting stakes as a proportion of the bankroll, the greater the chance of "bankruptcy" if things go wrong. Five consecutive losing bets at $500 each, for example, would eradicate a bank of $2500 fairly quickly. If the stakes had instead been $50, the bettor could have afforded another 15 losses before bankruptcy. To most bettors, this will seem intuitively obvious, yet it is surprising how many still insist on using stake sizes that a proper risk assessment would consider to be entirely unacceptable.
Despite the greater Vigorish (vig or juice), many bettors like to increase the number of selections to a wager, attracted by the higher returns. The chances of winning a parlay, however, will always be less than for the individual selections which make them. It is not initially apparent, therefore, whether the longer-term return will be superior to flat wagers, and perhaps more importantly, how the longer-term risks will compare. Much will depend upon the edge that a bettor can on average achieve for his selections and the preferred size of his stakes.
Clearly, one way to limit risk exposure is to reduce the size of the stakes on multiple flat bets. Unfortunately, this also reduces the potential to gain at the same time. There always exists a trade-off between the impulse to achieve higher profits and the necessity to control risk. Herein lies the essence of gambling. Risk takers will win more in the short term, but must accept the greater prospect of severe misfortune. Risk avoiders must embrace a slower rate of return, but can potentially look forward to a longer betting "career". Whilst there is really no right or wrong way to bet, it may be argued that proactive risk management offers greater long-term security for a fixed odds sports bettor.