Confusion regarding pot-odds and equity

    • cookyik
      cookyik
      Bronze
      Joined: 25.10.2013 Posts: 54
      While I was watching No-Limit Beginners Course - Lesson 8: Adapting to SSS & MSS video, at the introduction of the video(around 2:00) there is a example hand that talks about pot odds and equity.

      Here is the example:

      BU(Hero) 100BB
      CO 100BB
      BB 100BB

      Preflop: Hero is BU with A :heart: K :club:
      2 folds, CO raises 4BB, Hero 12BB, 1 fold, BB is all-in, CO folds

      On the video, it said
      "Hero has to call 88BB to win a 204.5BB pot (100+100+4+0.5).
      Hero needs to have <43% equity to play against BB's range."

      I thought pot odds is not calculated this way, I thought It should be I am risking 88BB to win a 116.5BB pot(Villain's 100 + CO's 4 + SB's 0.5 + Hero's 12)

      That gives me ~1.32:1 odds, Hero need to have <75% equity to play against BB's range?

      I am confused. Is calculating pot odds different from calculating equity?
      1.32:1 pot odds is actually equal to <43% equity against BB's range?
      Why is it different?


      here is the video:
      http://www.pokerstrategy.com/video/21068/
  • 6 replies
    • dragan2171
      dragan2171
      Silver
      Joined: 03.03.2011 Posts: 116
      pot odds is related to money you have to enter into the pot.
      equity is related to cards (your AK against opponent cards)
    • Tomaloc
      Tomaloc
      Bronze
      Joined: 17.01.2011 Posts: 6,858
      hi, the video explanation is right. it might not look intuitive, but you should count hero's 100 (instead of 12).

      something for you to think about... 500BB effective stacks, you have AA in bb, everyone folds to sb who open shoves.
      do you really need over 99% equity to make the call? you don't have that even against 72o, so where is the mistake?

      hint: you never-ever need over 50% equity to make a call that guarantees you seeing a showdown for no further cost. (ie, calling an AI for all your chips)
    • cookyik
      cookyik
      Bronze
      Joined: 25.10.2013 Posts: 54
      Thanks for replying dragan2171 and Tomaloc

      Umm it make sense, let me explain my thought now see if it is correct.

      if SB shove for 500BB, I will need to call 500 to win the SB's 500.
      Laying me exactly 1:1, that mean I need to win 1 out of 2 times.
      So in equity saying, I need to win at least 50% to make the call profitable.
      I was wrongly calculated the equity as 100%/1 = 100%, which is absurd.

      The above scenario is the maximum amount of equity I needed to make a call profitable, because normally there are some other money in the pot, which it makes at least something more than 1 to 1 odds. (like 1.2:1, 3:1, 5:1)

      Like in the video, the I am getting ~1.32:1 odds, then I need to win 1 out of 2.32 times. Therefore, I should divide 100% to 2.32 to get 43%.
      The mistake that I made when I was calculating equity was to assume I need to win 1 out of 1.32 times, which yield 75%.

      It totally make sense to calculate it this way.
      I think I was confused about the meaning of equity. I thought equity is telling how much money I am expected to gain in relation to my call. But rather equity is telling how much I money I am expected to gain in relation to the whole pot.

      I think I get it now, thanks!
    • TinoLaan
      TinoLaan
      Bronze
      Joined: 12.10.2011 Posts: 6,411
      Thanks guys :)
    • unshpe
      unshpe
      Basic
      Joined: 20.05.2013 Posts: 294
      Originally posted by Tomaloc

      hint: you never-ever need over 50% equity to make a call that guarantees you seeing a showdown for no further cost. (ie, calling an AI for all your chips)
      Add some extreme ICM tax and that never-ever turns into almost-never :P
    • RasTweet
      RasTweet
      Bronze
      Joined: 26.12.2009 Posts: 4,553
      Oh odds confused me big time as well long time ago. Thanks for the help everyone