Explanation of Leverage
The concept of leverage is closely linked to the topic of reverse implied odds. See the glossary entry under reverse implied odds to get a better understanding of this term. In some senses leverage is reverse implied odds but experienced from the point of view of the other player. If player A is suffering from reverse implied odds then his opponent player B, is benefiting from leverage.
In investing, leverage carries the connotation of investing funds that don’t technically belong to us. For example, on the forex market the broker might lend us $99 for each $1 we invest ourselves. In a similar vein the term leverage in poker refers to the impact our chips can have on strategy even though those chips are not directly contributing to the current pot size.
Example of Leverage used in a sentence -> Any time we have good leverage against our opponent, it means he is essentially suffering from reverse implied odds.
How to Use Leverage as Part of Your Poker Strategy
Imagine the following situation in Hold’em on the turn. We are OOP and our opponent makes a sizeable bet. We are playing with deep stacks meaning there will be some chips remaining for the river.
This is similar to the situation discussed in the glossary entry under reverse implied odds. Even if it appears we have the direct equity to make the turn call, we need to worry about the fact that our opponent will fire again on the river. If instead our opponent’s turn bet was all-in we’d be able to make the call based on direct pot-odds assuming we had the required pot equity.
So, facing exactly the same turn situation, the best decision can change depending on whether villain has stacks behind to fire a river bullet or not. Despite the fact that villain is not directly investing those chips on the turn, it impacts the best decision. These additional chips hence play a role despite the fact that they are not at risk (similar concept to leverage in investing).
Leverage is hence correlated to the stack depth. The larger the effective stacks the bigger the threat of aggressive barrels from our opponent on later streets. As a result, it’s theoretically correct for the aggressor to bluff more aggressively as the stacks get deeper. There is a lot more pressure on the defender when holding reverse implied odds type holdings as the stacks get deeper.