Each week, the Talking Poker series will highlight a particular poker term. We’ll give you a clear, to-the-point definition of the term and an example of the strategic concept to which it refers, so that you can start using the term and implementing the related strategy into your game. Today we focus on the concept of “equity.”
“Equity” refers to your “rightful” share of a pot as determined by your current chance of winning the hand. If you are heads-up with $180 in the pot and your chance of winning the hand is 50%, your “equity” in the hand at that moment is $90.
The figure does not refer to what you expect to win on that particular hand, but rather refers to the amount you would expect to win on average over multiple instances of the same situation. Sometimes “equity” is used in a less specific way as a synonym for “value.”
In a no-limit hold’em cash game you reach the flop in a heads-up pot with the board showing . Betting on the flop between you and a single opponent results in your being all in with the pot totaling $200.
You turn over for a straight flush draw while your opponent has for the best hand at the moment with a pair of aces. Even though your opponent is currently ahead in the hand, he is only a little under 44% to win the hand thanks to all of your possible outs, while you are just over 56% to win.
Your equity is calculated by applying the percentage chance of winning to the amount in the pot — here 56% of $200, or $112 of equity. Meanwhile your opponent’s equity is $88. (Of course only one of you will win the entire $200, depending on what the turn and river bring.)
In the above example we were able to calculate equity exactly after the cards were tabled, but when involved in a hand you must estimate your equity in a given pot based on your read of how your hand rates versus the hand strength of your opponent(s).
Say in that example your opponent was normally very tight and had three-bet you before the flop, then led with a bet on that flop. Given how the player has been playing, you believe it very likely he holds a strong hand like pocket aces or pocket kings. Knowing that you have such a strong draw and in fact have more equity here than those hands (or indeed, than most hands), you can call or raise his flop bet.
That said, your equity can change as a hand proceeds. Say you reach the turn in this same hand with the board showing . With just one card to come to complete your draws, your equity versus pocket aces or pocket kings has dropped to just under 30% of the pot, which might make it difficult to continue if your opponent bets and the resulting pot odds aren’t favorable.
Sometimes you’ll hear players say that when short-stacked in a tournament they’d rather go all in with a hand like than with , because if they are called they are likely to have more “equity” (i.e., a better chance of winning the hand). If called by a player holding , is almost 41% to win while is less than 27%. And if called by , is actually a little over 50% to win while is only about 30%.
Consistently correct decisions based on equity considerations over the long term greatly increase the likelihood of being a winning player.
Watch and Learn
Our Sarah Herring caught up with a few different pros during at break at 2013 World Series of Poker to talk about the subject of equity.
First Shannon Shorr provides a helpful definition of the term, then Mike Sexton talks about how the concept of equity affects starting hand selection in Omaha. Finally Eugene Katchalov relates the idea of equity to decisions about betting for value. Take a look: