Explanation of Implied Odds
Understanding pot odds is a prerequisite for understanding implied odds. Pot odds looks at the size of the pot relative to our investment in order to determine whether we have enough pot equity to make the call. Pot odds is most relevant for scenarios where we are facing an all-in bet from our opponent. See the glossary entry under pot odds and start with a basic understanding of how pot odds work.
Implied odds calculations can be deployed in scenarios when the bet we are facing is not an all-in bet; i.e. there are still chips left to play for on the later streets after we call. The maths for implied odds is identical to pot odds aside from one key difference. We calculate using the size of the total implied pot, not the actual current pot size.
What do we mean by implied pot? This is an estimate regarding how big the pot will grow by the river on average. See the strategy application below for an example of how this works in practice.
Example of Implied Odds used in a sentence -> With 200bb in the effective stacks, we easily had the implied odds to defend our gutshot when facing a flop raise.
How to Use Implied Odds as Part of Your Poker Strategy
Let’s see an implied odds calculation in action with a worked example.
Example – We are on the turn with $250 effective stacks. We have a nut draw with roughly 20% pot equity. The current pot size is $100 and our opponent makes a bet of $50 while out of position. Should we make the call in this scenario?
This example helps to illustrate why pot odds cannot be employed to solve every scenario. If we run a basic pot odds calculation here, we actually don’t get the right price.
We’d be investing $50 into a total pot of $200 meaning we’d need 25% pot equity to make the call.
($50/$200) * 100 = 25 or 25% pot equity required.
Since we have only 20% equity, this would actually be a losing call if we assume for a minute that our opponent’s $50 bet was all-in.
In this case, both players have an additional $200 to play for on the river. There is a good chance that we might win some of that extra money should we hit our draw. We need an implied odds calculation to factor this in. Let’s assume that we will always win villain’s remaining $200 if we make our hand.
While the total pot is $200 after we make our call, the implied pot includes villain’s extra $200 behind. We can hence run a pot odds calculation but the treat the size of the total pot as $400 rather than $200.
($50/400) * 100 = 12.5 or 12.5% pot equity required.
Suddenly the situation is looking much more profitable. We only need 12.5% equity to make the call and we have 20%.
Estimating the Implied Pot
In the above example we assumed we’d make villain’s stack in its entirety after hitting. While this may sometimes be the case, in most instances it is not. We won’t necessarily win villain’s full stack for the following reasons -
- Villain might not pay us off.
- We might opt for a non-all-in sizing.
- We might make our draw and still lose the pot.
In most cases we want to make a realistic estimate regarding how much we’ll win on the later streets. In the above example, let’s imagine we were to always make a pot-sized bet of $200 on the river. If villain paid us off exactly 50% of the time, this would be the equivalent to getting a $100 bet off with a 100% frequency. In other words, perhaps $100 as our total river earnings is a more conservative addition to the implied pot. If we re-run the maths -
($50/$300) * 100 = 16.666 or roughly 16.67% pot equity required to make the call.
We still clearly have a call in this case (since we have 20% equity), but the profit margins run a little closer.
The size of the implied pot is an estimate, it is not precise maths. The more reliable our estimate, the more accurate our implied odds calculations will be. Pot odds on the other hand is precise maths because we always know what the size of the total pot is after calling an all-in bet. In order to generate reliable estimates regarding our implied odds, it can be helpful to consider the following variables.
- Weak opposition results in better implied odds. (Perhaps our opponent is a calling station or likes to run big bluffs with a wide range).
- Strong opposition results in worse implied odds. (Our opponent is good enough to make the laydown with a higher frequency when we hit).
- Deep effective stacks results in better implied odds. (The more money behind, the more we can potentially win when our draw gets there).
- Shallow effective stacks result in worse implied odds. (If there are only $10 left behind for the later streets, then this is the maximum we can ever expect to win).
- Nut draws result in better implied odds. (It’s always best that our hand is the immortal nuts when it hits. We can look to get our entire stack in where possible).
- Dominated draws results in worse implied odds. (Even after hitting, there is a limit to the amount of chips a dominated draw wants to get into the pot. Our opponent is the one who will profit from the later street action if he has our draw dominated. We refer to this idea as reverse implied odds. See the glossary entry under reverse implied odds for more information on this topic.
- Being in position results in better implied odds. (It’s easy to control the action and get big payouts from our opponent while we have position).
- Being out of position results in worse implied odds. (Due to our informational disadvantage it’s harder to extract big payouts without our strong made hands).