MTT profability formula (payment structure/number of players/buyin)

    • ramadas
      ramadas
      Bronze
      Joined: 02.09.2011 Posts: 462
      Hello,

      I was thinking about some formula which will help to calculate profitability/risk-reward ratio for multi table tournaments (MTT). This formula would tell player which MTT is more potentially rewarding (not taking variance into account - just the math).

      In other words, how can I know which MTT below is better:

      A: 1250 USD Guaranteed with 78 players registered and 2 USD buyin where 4 places are paid

      1 - 562.5 USD
      2 - 312.5 USD
      3 - 225.5 USD
      4 - 150 USD,

      or the other

      B: 2500 USD with 565 players with 3 USD buyin where 40 places are paid.

      1. 650 USD
      2. 386
      3. 218
      4. 175
      5. 150
      6. 125
      7. 100
      8. 75
      (why I took this example? :evil: - a lot to write)
      9. 50
      10. 37.5
      11-13 30
      14-16 25
      17-20 20
      21-30 16.25
      31-40 12.5

      If you know such formula, could you please refer me to it? Book, online, forum?
      If not can we as a forum develop it according to math?
  • 6 replies
    • Asaban
      Asaban
      Moderator
      Moderator
      Joined: 22.09.2006 Posts: 8,241
      The calculation wouldn't make sense imo.
      In theory the most profitable tournament is the one with the highest first price. At least if you don't take variance into account (which is what you suggest). Unfortunately poker includes a lot of variance.
      The most profitable tournaments will be the ones that suit you best. If you like deep structures you may very well have your best ROI playing deepstack tournaments.

      The most important thing is to find the fields you enjoy. The more fish you find in the tournament the better you will perform.

      I don't know what you are trying to achieve by your request - do you really want to play your schedule based on some calculations that are painting the wrong picture of the actual situation?

      Regarding the two MTT's:
      If I had to choose one out of them I would choose number one. I enjoy tournaments with less variance. At the same time it offers a good payout. You will win way more often then you will win tournament 2. Another important point is the bigger overlay - so your 2$ are worth way more immediatly after buying in without even playing a hand. Last but not least you have a nice money bubble - if you play it right you gain a lot of value because your opponents will fold a lot.


      Cliffs:
      Number one!

      Regards,
      Asaban
    • bradomurder
      bradomurder
      Bronze
      Joined: 17.10.2008 Posts: 1,329
      I use this formula, it's an approximation but very very accurate

      Risk = ((Sqrt(N)/(1+ROI))^2)/(N/(n+B))

      Reward = (P/N)*(1+ROI)-BI

      where P is prizepool, N is number of entries, n is the number of places paid and B is the number of big prizes (big being greater that N/n * BI)

      to play the game I like it if the Risk*BI is less than 20x my roll the reward doesn't really come into BRM, because that's sort of taken care of by the B term
    • Biggles87
      Biggles87
      Bronze
      Joined: 05.04.2011 Posts: 31
      I think Asaban is right.
      For a start variance is part of the game. You need to take that into account. It needs to be part of your calculations.
      Bankroll Management suggests that for MTTs you should have 100BIs. So that would be either $200, or $300. That's how you calculate variance, you plan for the worst. :P

      I agree tournament one, MTT1 is better. If you have the bankroll & patience for it. You might have to play a lot of them before you see a cent. That requires a hell of a lot of patience and after 10 tournaments without a place (or maybe even just missing the bubble a few times you'll need a lot of discipline to maintain your best game).


      If you want some basic calculations here are some that might inform your decisions.


      For $2 you are getting.
      $1250 / 78 = $16. So effectively without looking at the site's rake it is a $16 dollar tournament.
      (4/78) x 100 = 5.12% theoretically you would cash if everyone in the field have an equal skill level (they won't).
      So theoretically you would be cashing once every 20 BIs.
      But you need to account for variance. It could be 25, 30, 50 or even more before you even cash once. You'd need a lot of patience, discipline, and endurance to cash for this one I think. Patience & Discipline are certainly two problems with my game, I don't know about yours. That's the challenge. :f_biggrin:

      For $3 you are getting.
      $2500 / 565 = $4.42. Still good.
      (40/565) x 100 = 7.07%. Although the decent prizes are in the top 10.
      Every ~14 BIs.

      For academtic interest alone, the comparable prizes start at 5th place and above for MTT2. So (5/565 x 100 = 0.88%) compared to 5.12% although the top 2 prizes for the 2nd one are higher.

      As Asaban saids it all depends on which tournaments suit you best. You're likely to bubble more often with MTT1, as by that point it is basically going to be Shove or fold, the skill is getting to near the bubble I guess. With MTT2 you will find it easier to cash but equally as hard to get the top cash prizes. If you think you can do it, can handle the bad beats and if you have the bankroll. Then MTT1 is a better ROI.
      Good luck.


      IN SUMMARY: After all that jibber jabber. Take the Number of Players. Divide by the number of paid places. That is one way of looking at a MTT's value. Not necessarily the best way. And remember Banroll Management.




      I'm a bit of a novice with the number side of poker so please correct any errors or assumptions I've made. :f_confused:

      Also what site is this? PartyPoker gets nowhere even close to $16 value for $2 BI. All the guaranteed tournaments get close to or exceed their guarantee.
    • ramadas
      ramadas
      Bronze
      Joined: 02.09.2011 Posts: 462
      Thank you all for valuable input! I don't want to participate in MTT just now. I know I have to have at least 100 buyins in my BR. I am building my BR slowly by cash games trying to have win rate over 0.

      1. I know variance is part of the game, but it is hard to predict/calculate. Maybe only one can say that the more players participate in MTT, the more variance there is. Freerolls are crazy with 6500 people playing for Qualifier worth for example 1 USD for next Satellite seat x 1. But how to incorporate variance into the formula which MTT to play?

      2. First MTT was from Everest Poker and second MTT was from Party Poker.

      I don't understand this:
      Also what site is this? PartyPoker gets nowhere even close to $16 value for $2 BI. All the guaranteed tournaments get close to or exceed their guarantee.


      Could you please rephrase it?
    • Asaban
      Asaban
      Moderator
      Moderator
      Joined: 22.09.2006 Posts: 8,241
      I will try to explain it for you:

      You have a guaranteed pricepool of 1250$ and a Buyin of 2$. If there are only 78 players there is a big overlay. The 78 players are only building up a small part of the guaranteed pool (in this case 78*2$= 156$). The rest of the pricepool is added by the site. In this special (and very unlikely) case the 78 players share a pricepool of 1250$. That means that the starting stack is worth 1/78 out of 1250$:
      1250$/78= ~16$

      --> Your starting stack is worth 16$ instead of the 2$ you paid for it.


      I just want to give some advice on BRM as well:
      If you play MTT's with >200 players your BRM should be at least at 200 ABI. If you plan on playing mass field mtt's (f.e. all tournaments on stars) you should better plan with 300 or even 400 ABI. 100 ABI is a really risky BRM in most cases. It's not accurate anymore and shouldn't be used by most players. In 2006 it made sense because players were bad and fields were small. Nowadays you have to be more conservative to be successful.

      Regards,
      Asaban
    • Biggles87
      Biggles87
      Bronze
      Joined: 05.04.2011 Posts: 31
      What Asaban said :D