The term “pot odds” refers to the odds you are getting with your calling a hand. For example, if you are involved in a hand where there is $50 in the pot already and it is $10 for you to stay in the hand, your pot odds are 5-1. This is what is called your effective odds. In addition to your effective odds, you will need to know the odds of hitting the hand you are trying to make. If in Texas Hold ‘Em you have a four card flush after the flop and the turn, there are nine outs for you to hit your hand within the remaining 46 cards that you do not know. 46-9 breaks down to roughly 5.1-1 odds for hitting the flush on the river. If the pot odds were 5-1 as in the example above, you should fold this hand assuming there is no other way for you to win the hand since your effective pot odds are paying less than the amount of times you will actually complete your hand. Over the long term, folding such hands will save you money.

What about instances where there are more rounds of betting ahead of you? Effective odds are great, but how do you use them to predict the future? This is where your “implied odds” come into play. Implied odds take into account future rounds of betting and are vital in determining whether or not you should stay in the hand. Let’s go back to the example above. There is $50 in the pot after the turn and it is up to you to call a $10 bet. You are chasing that fifth card for a flush again and you know that you have a 5.1-1 chance of making the hand. If you call the $10 bet, your play is incorrect—for now. If the pot has the promise of growing larger, it might actually be a good idea to play the current hand. If you suspect that your opponent will bet another $10 the next round of wagering, and at least three others will call besides yourself, your implied odds are actually 110-20, meaning that by risking $20 (two rounds of $10 bets), you are standing to win an additional $110. This breaks down to 5.5-1, meaning that your implied odds warrant a call. In other words, one of your nine outs will hit often enough to make you money over the long term.