Early in your poker career, you learned about pot odds and equity. You probably heard or read somewhere that when faced with a bet, you should decide whether to call by estimating your hand’s equity—by counting outs, perhaps—and comparing it to your pot odds. For example, a flush draw has about 36% equity against an overpair on the flop. If your opponent made a pot-sized bet on the flop, that would offer you 2:1 odds, meaning you would need at least 33% equity to call profitably. Your hand, with somewhat more than that, would seem to be worth a call.
This is a good way to learn some poker fundamentals but it’s beginner stuff. Real world decisions are almost always more complicated than this. For example: what if your opponent does not have an overpair? Is there any chance your pair outs are live? Do you have a backdoor straight draw? Is there any chance you have the best hand? If you call, will your opponent bet again on the next street? Might you find a profitable bluff if you miss your draw? Might you get another bet or two paid off if you hit your draw?
The fundamental problem with a simple pot-odds-vs.-equity analysis is that you are not guaranteed to realize all your equity by calling the flop bet. Calling guarantees you will see one more card, but that only gives you an 18% chance of making your flush. If the flop bet were all-in, you could profitably call. Because your opponent will be able to bet again on the next street, however, you must factor that risk into your equity calculation on the flop. We cannot put an exact number on these factors, but they all affect the EV of calling the flop bet.
Equity realization is a way to conceptualize how much the betting on future streets will help or hurt a particular hand. You can think of it as a coefficient, r, that serves as a bridge between equity and expected value. Multiply a hand's equity by its equity realization and you get its expected value; Equity * r = EV.
Hands that can profitably bet at a future decision point, whether for value or as a bluff, have the potential to realize more than their share of equity, while pure bluff-catchers tend to realize less than theirs. While sample pot odds analysis answers the question “How good is my hand now?”, equity realization answers the question, “How good is my hand likely to be on future streets?”
One set of hands with which you can anticipate profitable value bets on future streets are very strong made hands. When you flop a set, you often expect to be able to value bet it on many turns and rivers. Anticipating that value is part of what makes it desirable to build the pot on the flop. On boards where a set is less likely to be strong enough to value bet on future streets—say, 66 on a 9
8
6 flop—you have less incentive to build the pot.
Another set of hands with which you can anticipate value betting are draws to strong hands. The concept of factoring potential future winnings into a calling decision is often called “implied odds”.
The strongest draws tend to have the best implied odds. If your draw is to the nuts, you’ll definitely be able to value bet if it comes in. Better yet, your opponent can easily hold second-best hands with which he will be happy to put money into the pot.
When drawing to weaker hands, it’s harder to get paid off when you hit them. Think of 7
6 on a 982J board. Technically, you have an eight-out straight draw, but some of those outs are much better for you than others. On a Ten river, you have the low-end of a four-card straight on the board. It may be the best hand, but you will be hard pressed to get a bet paid off. In some cases, your hand might not even be good enough to call if your opponent bets.
Similarly, a 5
river is much better for you than a 5 river. You will not have to worry about running into a flush, and neither will your opponent, which will make him more likely to pay you off with weaker hands when you make your straight.
This concept applies pre-flop as well. Suppose that you are in the big blind, facing a raise from the button with either A6o or 98s. Which would you rather have?
Going by equity alone, A6o looks like the better hand. If you did not have to worry about future betting—if you were calling an all-in bet, for instance—then it would be the better hand.
The 98s will likely realize more of its equity, though. That’s because it has draws to strong hands like straights and flushes. It is much harder to make a straight or flush with A6o, and when you do, four of the cards will be on the board, making it less likely you get paid off.
Even when you make a pair of Aces with A6o, it is hard to get paid. The threat of the Ace on the board will scare off many weaker hands. When money does go into the pot, it will often come from an Ace with a better kicker.
When you look at the pre-flop equity of A6o, an equity calculator just gives you a number. The concept of equity realization helps you to see that most of that equity is wrapped up in hands that are tough to play after the flop: Ace-high, top pair with a bad kicker, and bottom pair. A6o has poor equity realization because it flops hands with poor equity realization.
Do not confuse equity realization with hand strength. 32s realizes equity better than A6o, but that does not make it a better hand. It has so much less equity to begin with that even if it realizes a larger percentage of that equity, it still ends up with lower EV. Suppose 32s had 30% equity and 80% equity realization, while A6o had 45% equity and 60% equity realization. The EV of 32s would be 24% of the pot, while the EV of A6o would be 27% of the pot. Equity realization is not a measure of a hand's absolute value; it is just a better estimate of a hand's value than equity alone.
Experienced poker players intuitively get this concept when it comes to pre-flop decisions but struggle to apply it after the flop. They want to make big bets when they believe they have the best hand, without concern for how well their hand will play on future streets if that big bet is called.
Equity realization is always contextual. It depends on factors like position, board texture, stack sizes, and the composition of each player's range.
Playing in position is always better than the alternative, and any hand will realize equity better when played in position. Strong hands have an easier time value betting, weak hands get more bluffs through, and marginal hands can pot control more effectively. They hate to fold hands with poor equity realization, such as bottom pair or underpairs to the board, because their opponent might be bluffing. Never mind that even if he is bluffing, he likely has many outs plus future opportunities to pressure marginal calling hands with big bets.
The exact influence of position varies with stack size. Deeper effective stacks mean more decisions and more opportunities for the in-position player to benefit from the extra information his position provides. To take this to an extreme, when the stack-to-pot ratio is 0—when a player is all-in, in other words—position does not matter at all. Unless there is a side pot with a third player, both players have equity realization of 100%.
Marginal hands benefit most from shallow stacks. They are hands with good equity but little to gain from further betting, as they are ahead of the weaker hands in an opponent’s range but not the stronger ones. Shallower stacks mean fewer opportunities for the opponent to value bet strong hands and bluff weaker ones, both of which are threats to marginal hands.
Conversely, strong hands and draws to strong hands realize equity better with deep stacks. When you have the nuts, more money behind means more potential winnings. When you have a draw to the nuts, it means more potential winnings when you get there plus more leverage for bluffs in case you don’t.
When playing post-flop, especially with deep stacks, try not to worry so much about whether you have the best hand on the flop and turn. Instead, think about equity realization. Build pots with hands that will play well on later streets. Keep pots small with hands that will not, and when necessary, be ready to fold them. Such considerations are worth more than you realize.
