Implied Odds – Bets you expect to win, which aren’t yet in the pot.
Implied odds calculations are simply pot odds calculations which
incorporate other information besides pot size and bet size. The most common type of additional information they incorporate is future betting which
is likely to occur. This is especially relevant for pot limit and no limit play, as the bet amounts tend to increase progressively in these games, and
future bets can be very large. Imagine, for example, that you are playing no limit Hold’em, you are on the button with KJ suited, and you flop the nut
flush draw. A player in middle position bets the pot, and the
cutoff calls cold. In this situation, you are getting
3 to 1 on your money if you call. A simple pot odds calculation reveals that you are approximately 5 to 1 against making a flush on the turn,
and one of your flush outs will also pair the board, giving you a non-nut hand. Clearly, you do not have pot odds in this situation, but that
does not necessarily mean that you should muck your hand.
First, you have to consider your implied odds. If you call on the button and hit your
hand on the turn, you are likely to get paid off enough to take the draw at 3 to 1. If any player also has a flush draw, you have the potential
for a really big payoff if you hit. In addition to this, any player who has checked in front of the bettor may also call, improving your pot odds.
When considering this, a call becomes much more palatable. This is a good example of implied odds probably existing even when pot odds do not.
Of course, the information you have based your implied odds calculation on is both subjective and incomplete. You have considered likely future
events, but you have not considered all possible future events, as that is impossible. One of the blinds could check raise and the bettor could
push all in for 100 times the pot, forcing you to fold after calling the pot sized bet on the flop, without ever getting to see the turn card.
There could be several players with the same flush draw, eating up your available outs, leaving you to draw dead or near dead. Any number of
things can go wrong. Still, implied odds suggest that a call is profitable in this situation, even though pot odds do not exist.
It is important to realize that pot odds calculations and implied odds calculations are two different tools with different utility.
You do not need to think of one tool as being superior to the other. Calculating pot odds will give you an idea about what your hand
is worth at that very moment, and so captures a moment in time in much the same way a photograph does. Calculating implied odds, on
the other hand, includes probable future events, and is more like a video clip of how the hand is likely to play out. Neither is
better or more correct than the other. In reality, both tools work better when used in conjunction with each other. Implied odds
calculations use more complete input information than pot odds calculations, and if that information is correct, will yield a more
accurate determination about the value of your hand. The problem is, the inputs about likely future betting are guesses. You are
basing you calculation on what you think will transpire based upon your reading of the situation. If your are wrong, your implied odds
calculation will also be wrong. That is why it is better to consider both pot odds and implied odds in conjunction with each other
when making a decision about whether or not to continue on in the hand. If you clearly do not have pot odds, you want to be fairly
sure your implied odds calculations are reliable or at least reasonable if you intend to call.
See also: Equity,
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