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Understanding Implied Odds - Mastering Small Stakes No-Limit Hold'em Excerpt

26/12/2017 by Jonathan Little
Book Excerpts

In my groundbreaking tournament series, Secrets of Professional Tournament Poker, I outlined my pre-flop strategy based on stack sizes. This concept was foreign to many players then, and to many, it still is even now. Even some decent players who frequent the middle stakes have not extensively thought about their pre-flop strategy, or they use the same predefined strategy for all stack sizes. This is a significant mistake.

For example, raising A-2s from early position is a perfectly fine play if you have a very deep stack, but with a shallow stack, it is an easy fold due to its lack of implied odds. The term “implied odds” refers to how much you can potentially win from your opponent when you make a premium hand. When the stacks are deeper, you can play more speculative hands because when you improve to the nuts (the best possible holding), you have the potential to win a huge amount of money, even though it will only happen occasionally. If you only win a small amount of money when you make the nuts, the amount you win will not offset the amount you lose when you fail to connect with the flop (as will often happen).

It is important to understand that in every poker situation you encounter, sometimes you will win and sometimes you will lose, depending on how the cards fall. What distinguishes the profitable situations from the unprofitable ones is how much you stand to win or lose on average, if you ran the same situation a million times. As an oversimplified example, let’s look at a situation where you have 3-3 and are facing a 3 big blind raise from a player who will always double you up if you make a set (three of a kind). This information alone does not tell us if calling with 3-3 before the flop is a profitable play. The stack sizes are vitally important because they determine how much you can potentially win when you make a set.

If the stacks are 50 big blinds, you have to put in 3 big blinds to potentially win 50. Knowing that you will flop a set 12% of the time, you will win 50 big blinds 12% of the time and lose 3 big blinds 88% of the time. The equation to determine your profit in this situation is:

Profit = (% of time you make a set) X (amount won with a set) – (% of time you don’t flop a set) X (amount lost when you don’t flop a set)

In this case, that translates to 0.12 X 50 - 0.88 X 3 = 6 – 2.64 = 3.36, which means that you win 3.36 big blinds on average when you hold a small pocket pair and call a pre-flop raise of 3 big blinds from your 50 big blind stack before the flop.

Sometimes you will win 50 big blinds and sometimes you will lose 3 big blinds, but in the long run, you will win 3.36 big blinds on average, making this a very profitable situation for you. Now look at what happens when you have a 12 big blind stack (instead of a 50 big blind stack) and face the same 3 big blind raise. In this case, you only win 12 big blinds when you win but still lose 3 big blinds when you lose.

The result is now 0.12 X 12 – 0.88 X 3 = -1.2, which means that you will suffer a loss of 1.2 big blind on average when you call the pre-flop raise with 3-3 when your stack is only 12 big blinds deep.

Since calling in this situation is a losing play, you should play your 3-3 in a different manner, either by going all-in pre-flop or folding. How to figure out if going all-in is profitable will be discussed later.

When discussing stack sizes throughout this book, I will always refer to the “effective stack size”. The effective stack size is the shortest of the stacks involved in the pot. For example, if you have 200 big blinds in your stack but everyone else has 30 big blinds, you are playing with a 30 big blind effective stack. This is because the most you can win or lose is 30 big blinds if you get only one caller. If the stacks were reversed, with you having 30 big blinds and everyone else having 200, you are still playing a 30 big blind effective stack. Of course, I realize that all stacks at the table are rarely equal. You have to do your best to estimate the rough effective stack and play accordingly. For example, if you are in middle position with 40 big blinds and the players yet to act have 20, 40, 40, and 35 big blinds respectively, you don’t know which player will end up being your opponent, so you have to make a rough estimate that you are playing a 35 big blind effective stack (although that changes if only the 20 big blind stack gives you action).

I hope you enjoyed this excerpt from Mastering Small Stskes No-Limit Hold’em. You can get the full book by clicking this link.