Cash Out Tourney Strategy

I read a thread here a few days ago about a new type of tourney on FTP called a Cash Out Tourney. What this does is basically take your buy-in and split it into two buckets, a prize bucket and a buy-in cash out bucket.

At any time you can cash out all or part of your chips, with the exchange rate at 50% of your original buy-in to original starting stack. So for example, if you start with 1500 T$ and it's a $20+2, then at any time you can cash in at an exchange rate of $10 per every 1500 T$. This is important, because let's say at the end of the first hour your have 6000 T$, then you can cash out for $40, which is roughly equivalent to an ITM finish.

I think this brings up some interesting strategy questions.

1) Is it +EV to take advantage of the cash out
2) Assuming +EV, when is the best time to cash out
3) When cashing out, do you do a partial or full cash out

To keep this post on the shorter side, I'll post my thoughts on each of these as separate posts, and this will make it easier to discuss as well.

I think that you have to treat a cash out tournament as 2 games in 1. First, you are playing for the 50% prize pool, so in this part I think you just play normally.

The second game is really interesting. If you have made it to about level 6 or so and have a comfortable stack, then I think you almost have to cash out some of your stack.

- If you don't cash out, then you are depriving yourself of winning a part of the cash out bucket. True, if there's any money left in this bucket at the conclusion of the tourney then it gets added to the tourney prize pool, but you have to share it with all of the other ITM winners.

- Cashing out reduces variance, and I think this would be welcome for many players' BRs.

- Cashing out is 100% guaranteed. Even if you are top 3 after level 6 in a large field, making it ITM is not a foregone conclusion.

Anyone have any thoughts on this?

As in many other poker decisions, I think the answer is "it depends".

As it gets deeper into the tourney, I think the answer gets easier, since the value of the cash out stack is getting lower in value relative to your M.

For example, late in the tourney at level 15 when the blinds are 300/600/70, each M is worth 1530 T$. If you cash out 1500 T$, you get $10. So in this case as long as your stack is healthy, you should cash out as much as you feel comfortable.

You can think of it in another way. In the WSOP main even, if around day 4 or so you offered the option to cash out 2x your starting stack (40k T$) in exchange for $10K, I'm sure there would be a large portion of the field that would take this deal.

So for the question of when to cash out, I think you have to pick a point in time in the tourney when it makes sense for you and it won't make a significant impact on your ability to win the event.

Also, I think you need to make a decision once you're ITM, how much is your stack worth in cash out terms vs. your probability of going deep. This is based on the fact that you need to be at least FT to make any decent a decent pay.

Again, I think it depends on the situation, but here are some thoughts.

You have to make a judgement call on the utility of the T$ that you are cashing out to your quest of winning the tourney. A couple of examples might help here.

All examples assume 2000 entries and 300 payouts,

- If you're close to the bubble and you think you have to double up at least once to make it ITM, but your cash out value is 1x buy-in, you might want to take the full cash out. The reasoning here is that your ITM payout may be less than 1x buy-in because the prize pool is only 50% of the total payout pool.

- As soon as you make it ITM, you have evaluate your stack vs. all others. If you're short stack, then it might make sense to do a full cash out and try again. You've basically made 2x a regular tourney ITM cash, because you cash out for your stack plus the ITM payout.

As I think about this more and more, I'm convinced that there might be a need for a spreadsheet to figure all this out.

Maybe when I have a couple of hours and I'm not playing, I'll create a spreadsheet to help analyze this.