Equity Realization

(Editor’s note: PRO/CORE subscribers may wish to review the CORE lessons on expected value (EV) and equity before proceeding.)

In order to best understand realization, we first need to take a closer look at equity. Unfortunately, this term is often used to refer to two different things. Sometimes it refers to the likelihood our hand will win (e.g. %W) and sometimes it refers to our share of the pot. Let’s clear things up by giving them more specific names:

Hand Equity (HE) = the likelihood our hand will win

Pot Equity (PE) = our share of the pot

Note that when discussing hand equity, we’re usually making an estimate. This is where tools like Equilab come in handy. We can put in our hand and our best guess at our opponent’s range, and the tool will calculate the percentages for us.

Of course this is only an estimate because, assuming there are chips left, one player may decide to fold to a future bet (e.g. fold equity may occur.) This is where the concept of realization comes into play.

Realization in poker describes the relationship between our estimated hand equity and our actual hand equity. It can also be used to describe the relationship between our estimated value and our actual value. While some factors such as differences in player skill are difficult to quantify, other factors, such as position, stack depth, and playability, are easier, especially if we use a GTO tool.

Let’s look at a $.50/1.00 example where we face a flop decision.

It is folded to us in the small blind, and we look down at 3h3s.

The SB and BB both have $100. We raise to $3 and the BB calls.

The flop is Ts 7d 2h.

If we assume that the big blind is calling with a 50% range of hands, then Equilab yields this:

(The full BB range is: 99-22,A9s-A2s,K9s-K2s,Q9s-Q2s,J9s-J2s,T8s-T4s,97s-95s,86s-85s,75s-74s,64s,53s,42s+,32s,AJo-A2o,K6o+,Q7o+,J7o+,T7o+,97o+,87o,76o,65o,54o)

The SB has an HEestimated of 49%.

If no more bets went in (i.e. both players checked to the river), then SB’s EV would be

EVestimated = Pot * HEestimated = $6.00 * .49 = $2.94

What if we enter the same hand into a GTO tool such as PIO Solver? Then, we can arrive at a more realistic value for EV, since the tool takes position, stack depth, and hand playability into account. Making some assumptions about bet sizes, PIO Solver shows us this for EV:

Thus, a more realistic value for our EV is $1.34

Now, we can make a more precise, quantitative statement about our realization or R.

R = EVrealistic / EVestimated = 1.36 / 2.21 = .62

Thus, we see that being out of position, with a high stack-to-pot ratio, and a hand with poor playability can yield as low as 62% of our initial estimated value.

It’s a good exercise to try these calculations for a variety of scenarios to hone your sense of how much these factors will affect your realization for different hands on different boards.
Where things get really interesting is when you start running flop subsets through these GTO tools. A flop subset is an attempt to represent all possible flops using only a small number of carefully chosen flops. The advantage to this approach is that by simplifying the overall domain, average home computers are able to draw meaningful conclusions about how one range will perform against another …preflop! With this knowledge, you can calculate R for an individual hand that is up against a given range. And this in turn means you can conclude whether or not any given hand is worth opening or not.

This is the power of R!
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Playing From The Blinds Group Coaching Session

For a further discussion of how R factors into preflop decisions, watch Mike Gano’s group coaching course on blind play and building preflop ranges. As usual there will be plenty of time to ask questions on the material covered in the presentation and related areas of poker.

PRO members can watch a replay of this live coaching session through this link.

Now is also a great time to upgrade to PRO if you haven’t already. Replay all previous group coaching sessions, get complete access to CORE, the entire PRO video library, every Crash Course, and more.