Implied odds is an interesting concept that takes into consideration the possibility of winning a bigger pot further down the line if your hand improves. Even if you have unfavourable pot odds, your implied odds can make the difference between a fold and a call.

There’s even a formula you can use to calculate implied odds. Although you’ll have to make some assumptions about your opponent’s actions.

First, here’s a run down on implied odds, what it means and when it matters.

What are implied odds?

Implied odds are different to pot odds. Pot odds are the odds that you have now based on the bet and pot size. Implied odds account for the possibility of winning more chips further down the line if you improve your hand.

In effect, implied odds is the notion that you can extract more value on later streets when your hand becomes a monster. This can make up for poor pot odds, giving you a mathematical-based reason to make calls.

It’s not an exact science, as we’re about to find out, but there are definitely times when it’s important to take implied odds into consideration.

When do implied odds matter?

Implied odds are most relevant when you have a drawing hand, such as a straight draw or flush draw. You won’t win at showdown if your hand doesn’t improve, but if it does improve you stand to win a big pot.

For example, let’s say you have a flush draw and are facing a $100 bet into a $100 pot on the flop, giving you 2:1 pot odds. Strictly speaking, you don’t have the odds to call with a flush draw here.

But, if you hit your flush, you’re confident that you’ll get paid an average of $300 more on the turn and river. If you include this implied earning of $300 in the sum, boosting your implied odds, you can more easily justify the call.

Another clear example is small pocket pairs preflop. Unless you hit a set, the chances of winning the pot at showdown are very slim. But the odds of flopping a set with a pocket pair is less than 12 percent, meaning 88 percent of the time you will miss and be forced to fold.

Given the typical pot odds of calling a preflop raise, it would simply never be profitable to play small pocket pairs in the hope of set mining. But if you do flop a set, which is a very well hidden and strong hand, you’re quite likely to get paid or even double up against paired hands.

The implied odds of this situation mean that you can justify calling for around 5 percent of your stack to set mine.

Calculating implied odds

Calculating implied odds is very complex. Thankfully, there’s a simplified way to work it out. The formula is:

(Pot Size + Expected Win)/Current Bet

Let’s put some numbers in to the formula to make it clearer. Running with our flush example above, the pot is $100 and you’re facing a $100 bet. If you turn your flush, you expect to make an average of $300 more in the pot.

The formula is ($100 pot size + $300 expected win) = $400/$100 current bet = implied odds of 4:1

In this situation, Your pot odds are 2:1, yet your implied odds are 4:1. In reality, the odds you actually need to call are going to be somewhere in the middle.

Unfortunately, there’s also one glaringly obvious problem with this calculation. The formula is a little flimsy because we can’t know the expected win part of it with certainty. We can see the exact pot size and current bet, but it’s impossible to truly know what we stand to gain in the pot.

To come up with your expected win, you’re going to have to make several assumptions based on other factors in the hand.

Working out expected win for implied odds

Expected win should be an average of all possible outcomes, not just the best case scenario. If you take the best case scenario, such as assuming you will stack your opponent 100 percent of the time, you’re going to be using implied odds incorrectly to justify terrible calls.

For example, you can’t assume that every time you hit your flush you’ll get paid the maximum. Or that every time you flop a set you’ll double against top pair. There will also be times when opponents don’t have anything to bet with. Or when they check back instead of bluffing.

If you think you’ll win a pot sized bet half the time and nothing the other half when your opponent folds, your expected win is half a pot sized bet.

There are many factors that you’ll have to work with to gauge your expected win with any sort of accuracy:

• Stack depths – To ever make it worth your while chasing a hand without the correct pot odds, you’re going to need to be able to win a significant chunk of chips. If stacks are shallow, implied odds don’t count for much. So, stack depth is extremely important when it comes to implied odds. The deeper the better.
• Opponent’s hand strength – If your opponent has a whole load of nothing, then it’s unlikely you’ll be able to extract maximum value. You’ll need to have a good idea of their hand range to be able to calculate your expected win for implied odds.
• Opponent’s tendencies – If opponents don’t have a particularly strong hand, it will be helpful if they have tendencies that allow you to extract the maximum. Such as calling down with weak hands or making outrageous bluffs. A tight opponent is less likely to pay you off than a loose one.
• Position – It’ll be much easier to extract value if you have position, as this will allow you to inflate the pot more readily over the course of the hand.