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Equity ()

Definition

The equity or pot equity refers to the share of the pot belonging to a player based on his long term chances to win.

Explanation

If the pot is $10 and a player has a 50% chance to win, then his equity is $5 because according to the law of large numbers he will win $5 on average.

One central theme related to pot equity is expected value (EV), or the amount that will be won over the average of all possible outcomes of a given situation.

Whereas the odds and pot odds are only concerned with whether a call is profitable when a player has a draw, equity calculations can tell whether a move is profitable or not so that a player can tell which move maximizes the equity or expected value.

The basic idea is to get away from categories like draws and made hands and to evaluate a hand on the basis of its probability of winning. A hand with a high chance of winning, whether finished or not, results in a high share of the final pot, a high equity and expected value.

Example (Texas Hold'em):

Player A	Player B	Flop

Player A has the pair of aces and the current best hand. If there were a showdown now, then he would win. But B is actually the favorite here. The probability that he will obtain the best hand by the river is around 66%, whereas A will only win 34% of the time. It is therefore in B's best interest to make the pot as large as possible, since on the flop 66% of the final pot belongs to him. He has the superior hand and so should raise every bet made by A and even go all-in to maximize his profit.

A calculation of the best move in this situation takes into account all the moves B could make and all the outcomes that could then result.

EV (fold) = 0$

EV (call) =...

EV (raise) =...

The action with the highest EV is the most profitable.


Related Topics:

Expected Value, Pot Odds, Odds