Why You Need to Know About Equity in Poker

Poker equity, also known as pot odds or pot equity, can seem very complicated, but there’s no need to be intimidated. The simple guidelines here should help you apply the principles to your playing strategy.

What is Poker Equity?

The traditional definition of equity, from the world of financial management and markets, is the amount of money that would be returned if all assets were liquidated and all debts were paid off. In Poker, equity is the share of the pot that belongs to, based on the odds that you’ll win at that specific point in play. Put another way, it’s the percentage of time that the hand you are holding would win the round based on value alone

The psychological elements of the game don’t come into the definition of pot equity; you need to define the equity for yourself, factor in the individual personalities and tells of your tablemates, and decide what to do.

You can’t actually determine the exact equity value here, but applying mathematical principles is helpful when you’re trying to decide what moves you should make. Using analytical principles in this and other ways became popular after Chris Moneymaker introduced Poker to a whole new generation of young players.

Calculating Poker Equity

To determine pot equity, you need to assign chances of winning to your hand, in terms of a percentage. For example, imagine you have an 80% chance of winning and you bet 1000 chips. Your opponent calls, and bets 1000 chips of their own.

Now the pot is standing at 2000 chips, which amounts to 1600 chips in equity. You just increased your equity by 600 chips. Pot equity changes with each player’s turn, during every street in the round. With time and practice, you’ll be able to determine your current equity from moment to moment.

Using Poker Equity

After you’ve put a number on your likelihood of winning, you can use this knowledge to decide how you want to bet. If your odds of winning are low but you confidently place a large wager, you want your fellow players to believe that your odds are high. They’ll fold because they believe they can’t win and give you the pot or call and grow both the pot and your equity.

There are 2 key assumptions here; that you’ve read your opponents correctly, and that they are reading your actions in the way that you want them to. If you’ve underestimated their equity or they work out that you’re bluffing, you’re likely to lose the round.

The other factors that you need to consider when betting and thus sending a message about your pot equity are how big your stack is, and how close you are to the money in terms of your position at the table. Remember, a lot of Poker online is still a mind game. That can feel very ephemeral and assigning values to your winning odds can ground you and help decide what to do in the middle of a dynamic hand.