Equity is a very important concept that plays a very big role in shaping poker strategies and making complex calculated moves. It's also pretty easy to understand what it is:
Let's say that you and I are playing heads-up no-limit poker. Furthermore, it's televised (for some bizarre reason), so the audience at home know what we each have. If you have ever seen poker on TV, then you know how this works - they show your hand to the left next to your name. When all the hands are known, many shows then display how likely each hand is to win the pot at showdown, by some percentage. The commentator may say something like "He's 78% to win here, but he doesn't know it!" Those percentages show the average amount of times that the specific hands will hold up to win once all the cards are dealt. This is usually calculated with simulators, using a computer's power to check the outcome of very large numbers of possible sequences on the flop, turn and river.
And that's all there's to it - that given percentage constitutes your equity in the pot, at this point. Of course, the equity numbers for each hand will change a lot once the flop comes. Even a huge favorite like AA could suddenly find itself drawing dead (equity = 0%) after the flop when someone flops a straight flush. But flopped straight flushes are freak occurrences, and in the long run, whatever percentage the AA was to win pre-flop will prevail. There are great tools like our poker odds calculator that can show you your exact equity in any given situation (if you know the hands involved).
Now, once we understand what the concept of equity means, it's time to explore how we can use it to our advantage. Specifically, I want to introduce you to the concept of betting for value before all the cards are out. This is commonly done even by absolute beginners, but it's not always known exactly why, and it's not always done at the right times. The situation itself is simple, let's say that you have:
on a board of
There are two other people with you to the flop, who both called your pre-flop raise. They check to you. You figure to have the best hand, so you bet. You get one caller and the other guy folds. Not a particularly uncommon scenario, but let's look closer at your reason for betting on the flop: You figured to have the best hand. That's a good reason, for sure, but it's hardly a very specific reason. What does it mean to have the best hand? Unless they both fold, there's a chance that you've just now put in money with what will turn out to be a losing hand by the river - one of them may be calling with 7-2o, and will catching another deuce on the turn. Your bet on the flop will have cost you money, not won you money. Do you recognize this reasoning? It's pretty common, and I think most players when they just start out struggle with this idea - that raising with a hand that may be outdrawn is actually correct. After awhile, they will have been subdued by the books and articles who all tell them to raise in a situation like this, and in time they will do it by habit. Let me explain what makes it correct, though, and further down we will look at some examples, some of which may surprise you.
We've already suggested that your opponent holds 7-2o in this flop, so there is a chance that he will outdraw you. In fact, he has five outs to win: Three sevens and two deuces. The odds of that happening on the turn are 40-5 against (40 of the remaining cards on the turn will not help him, and 5 will) - this translates to roughly an 11% chance of being outdrawn on the turn. Then he'll have a chance to outdraw us again on the river, so his actual chance of winning is higher still, around 19%. Conversely, this means we have an 81% chance of winning. Now we have the percentages calculated, and we know that these numbers represent our equity in the pot. What does it mean when it comes to our betting or raising?
It means that for every dollar we manage to get into the middle of this pot at this point, we will win 81 cents.
Since Mr. 7-2o will call our bets, we only supply half of the dollars that go in - and we get to keep 81% of our money, as well as 81% of his! All in all, for every bet we make, we stand to win 1.6 bets back. And that's why betting and raising is correct - we will win more than our share of the bets.
The above example is an obvious application of equity, and one that everyone almost instinctively gets right - raising with the best hand is a good move. Here's a key point, though: Sometimes, you can raise with a hand that is not the best hand right now but has such a big chance of becoming the best hand that you still make money from betting immediately. And I'm not talking about semi-bluffs here, I'm talking about situations where you bet or raise, hoping that everyone will call you, despite having only a high-card hand. One of the most desirable examples of this is when you have the top two cards of a straight flush draw. For example, imagine you are holding:
on a board of
Imagine in this hand there are three other people with you seeing this flop. Somehow, you know that one of them has a pair of jacks, one has a pair of tens and the third guy has a pair of treys. Neither of them hold a king, queen, ace or nine in their hands, nor any spades. Of course, I'm describing a perfect scenario here, but play along for now.
A quick lookup using an odds calculator shows that we have a whopping 65% equity. Again, we can happily invest any amount of money on this flop, expecting to win back 65% of all the bets that go in. But now we're an even better situation than the example above - we only put in one out of four dollars going in; above, we had to pay half. For every dollar we pay here, we will win back $2.6. This is, strangely enough, a better situation for us than flopping top pair, top kicker in a heads-up pot. We have a lot of equity because of the many cards that will give us the best hand, and the two chances we have of hitting those cards. In our invented scenario, we have as many as 9 flush outs, 6 over card outs, and another 6 straight outs (that aren't also flush outs) = 21 outs, or 21 cards in the deck that our opponents need to dodge twice to win. That's almost half of the remaining deck.
So here we find a proper place to raise because we have high equity even with a non-made hand. A more common situation is when we have the nut flush draw on the flop (although it doesn't have to be as extreme as it was here where we also had straight and over card outs). Our flush will arrive somewhere around 35% of the time before or on the river, which means that unless the board if paired, we have 35% equity in this pot. With two or more opponents, raising this flop is correct! We expect to win 35% of every bet that goes in, and if we put in less than one third of the bets (which we would be with two opponents), then we're winning money in the long run. This is a very common tactic among intermediate players (sometimes even over- and incorrectly used), and understanding why it's a winning play means understanding equity.
There are advanced tactics that rely heavily on complex equity calculations, one of the most well-known being the semi-bluff. Here, the play requires a certain amount of fold equity (or "chance that opponent will fold times his current equity in the pot") in order to be a winning move. Fold equity will be discussed in more detail in our article on semi-bluffs.
Poker Fundamentals series written by Fredrik Paulsson.
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