I'll give it a go but essentially its the inverse of the odds.

Your formula is : ( Market Odds/Rated Odds - 1 ) / Rated Odds

Lets assume your Market odds were $3 and your rated odds were $5.

The Market gives it a chance of 33% winning and 66% chance of losing You give it a 20% chance of winning and a 80% chance of losing.

So your rated odds of it losing are 80% = $1.25 and the market rates it as a 66% chance which is 1.51

Put those figures into your forumla :

(1.51/1.25-1)/1.25 = 4.832

Now to work that out into a forumla should be too hard.

(1/(1-(1/Market Odds))/(1/(1-1/Rated Odds ))- 1 ) / (1/(1-1/Rated Odds ))

Lets try that for the $3 and $5 ratings above:

= (1/(1-(1/3))/(1/(1-1/5 ))- 1 ) / (1/(1-1/5 ))

= (1/(1-(0.33))/(1/(1-0.20 ))- 1 ) / (1/(1-0.2 ))

=(1/(0.66)/(1/0.8)- 1 ) / (1/0.8)

=1.55/(1.25-1) / (1.25)

= 4.832

Looks good to me.