# Equity

word type: *noun*

- The amount you can expect to win in any poker hand based on the percent chance you have of winning multiplied by the size of the pot. It is a synonym of "expected value." For example, if a pot was $1,000 and a player had a 70% chance of winning it, he would have equity of $700.

## Did you know?

That equity can be applied in any situation where there are multiple possible outcomes? For instance, let's say you go to a restaurant where there's a good cook and a bad cook, but you have an equally likely chance of receiving food from either cook. Your equity in that situation is that you'll get a so-so meal! Of course, food cannot be averaged, so it's an either-or situation, but that's your average expectation.

In another more mathematical scenario, let's look at lottery tickets. Let's say the total jackpot is $10 million. Each ticket you buy for $1 gets you a 1 in 20 million chance to win the full $10 million (ignore the potential for a split jackpot). In that case, your equity for your $1 spent is equal to 50 cents. So from a mathematical perspective, you will average a 50 cent loss on every lottery ticket that you purchase. Of course, because a lottery is winner-take-all, just one winning lottery ticket can make it so you would be a huge winner compared to your lifetime investment. However, that doesn't change the mathematical expectation/equity that you are giving away 50 cents each time you want to contribute 50 cents to the jackpot in order to have you chance at winning. In other words, it's dumb to play the lottery.

## At a Poker Table

Your equity at a poker table is defined by the skill of your competition in relation to your skill. For example, let's say there are 8 other players at your $5/$10 no limit holdem table. Two of them are big winners and they each win about $10 per hand in the long-run. Three players are basically break-even players. And the last two players are fish who each lose around $15 per hand in the long-run. That would mean that you would have $10 per hand of equity.

Of course, the calculation to arrive at that conclusion is *extremely* complicated. It depends on the exact mix of players at the table, how players are seated and many other factors. There's no real-world method to calculate expectation to such a precise degree. In the real-world, most poker players look at a table, see if they can spot some fish and, if so, they sit and hope for the best. In reality, expectation and equity are hopelessly difficult to calculate and playing poker requires a certain level of confidence along with a leap of faith.