Why Being ‘Priced In’ Is A Myth

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Yeah, you read that right. It’s a myth. Or at least, the way it’s usually expressed is erroneous and outdated, to the point where it’s got a lot of people believing in false logic. I’ve seen a few of my students refer to this idea recently and I think there’s a widespread misconception about it. The idea that there are certain situations in MTTs where we should be closing our eyes and calling a bet or shove without considering the villain’s range is a huge over-simplification. Let me tell you why.

Some years ago, before online poker existed and when live poker was the only way to play the game, the idea of ‘equity’ as a poker concept was unheard of. Early poker theoreticians had developed the concept of ‘pot odds’, to the point where basic calculations were possible, and people had some idea of which hands were favourites in which situations – there’s a scene in ‘Rounders’ where Mike describes the classic ‘pocket pair vs overcards’ situation, nowadays referred to as a coinflip, as “6 to 5 or even money either way” – but no-one dared to include a decimal point in a calculation. Not to mention, the nature of live poker meant that most people were only ever doing approximate pot-counting calculations anyway. Everything was vague and ill-defined.

People knew that if you were getting 2 to 1 odds with ‘two live cards’ facing a preflop all-in, you should probably call, or that a set was roughly a 3 to 2 favourite versus a flush draw. This was about as far as the mathematics of poker education went for some time, for the most part.

The technology necessary to run simulations of one hand versus another for thousands of iterations didn’t exist yet, the concepts of ‘ranges’ and ‘equity’ were unknown, and the poker community at large didn’t yet have the appetite for exploring the minutiae of the mathematical side of the game. But then along came online poker, and everything changed.

With online poker came hundreds and thousands of players who wanted to improve, and understand the game on a deeper level. Software like PokerStove and Holdem Manager eventually appeared, and hand history replayers allowed players to retrospectively know their precise pot odds in single-chip units.

People started to become aware that every player in every spot has a certain range of hands, and every hand has a certain amount of equity versus every range of hands. People could analyse their decisions and develop complex preflop shoving ranges and postflop lines, based on solid mathematical evidence.

These developments highlighted the vague nature of traditional live poker logic regarding the idea of pot odds. They allowed us to realise that getting 2 to 1 pot odds means we need 33% equity in the pot, and that there are many hands in many spots which actually have less than 33% equity against certain ranges, so we should fold them.

Our understanding of profitable shoving ranges, calling ranges, bluffing ranges, river check/shove ranges, 6bet/fold ranges, and every other range you could think of, improved dramatically. But for some reason, the old logic and terminology that there is some arbitrary, ill-defined threshold of pot odds above which we are unconditionally ‘priced in’ to call a bet, seems to have persisted.

The reason for this, in my mind, seems to be the simple fact that many people struggle to correctly identify their opponents’ ranges. This is expected – it’s part of the learning process. It’s also fairly common that people “can’t fold when they know they’re beat” – another side effect of simply learning the game.

People want the nature of poker to be simpler than it is, they want to have rules to follow, they want to avoid tough decisions and marginal spots. They’d prefer to be ‘priced in’ to call an all-in bet or river bet from their opponent and then have the option to subsequently blame variance or their opponent’s bad play for costing them the pot, rather than risk making a tough fold in a spot where they’ll never know if they were ‘right’ or not by seeing the results.

But here’s the simple truth about pot odds and being ‘priced in’ to call a shove or river bet – if you’re confident enough about your equity vs your opponent’s range, you’re never ‘priced in’ in a general sense, because it’s just a math problem. I’ll show you some examples of this shortly, but essentially what this means is that if you’re pretty sure you only have, say, 10% equity versus your opponent’s range, you should only call a bet if you’re getting 9 to 1 or better. It really is that simple – establish their range, establish your equity, and either call or fold.

There are a couple of caveats here – firstly, that it’s important to leave a margin for error in situations where you’re not really sure of the villain’s range. Secondly, remember that equities run closer together the earlier you are in the hand – you’ll usually have between 30-70% equity preflop (incidentally, this is part of why it’s often bad to fold even weak hands preflop if you’re getting great pot odds), whereas on the river your hand is either ahead or behind, so you either have 0% or 100% equity in that particular hand. In these river spots, it becomes a matter of simply asking “how often do I have the best hand here?” instead of considering future outs.

Now, let me present you two contrasting examples to illustrate the point. They’re both fictional hands which never actually happened, and as a result I won’t fill in all the unnecessary details. But imagine first of all that you’re playing a hand against a standard, tight villain, who plays very straightforward and doesn’t make big bluffs.

You have Ace-Ten of hearts. You raise preflop, and the villain calls in the big blind off a short stack. The flop comes 9-5-2 with one heart. You make a standard continuation bet, and the villain immediately check/shoves. You look back at his stack size and realise you’ve miscalculated, you thought he had more chips! Even though you see that there’s 3.5k in the pot and it’s 1k to you to call, you figure he always has one pair or better in this spot, sigh, berate yourself for not looking at his stack size, and fold.

You just made a mistake. Versus an admittedly arbitrary range of exclusively 9x hands and pairs 22-99 (which includes all three sets), Ace-Ten of hearts has 25% equity, and 3.5 to 1 pot odds means you need 22% to call. With a 3% positive gap between what you need and what you have, this is enough of a margin for error to make it a (somewhat reluctant) call.

However, if we played the exact same hand with pocket fours, we’d only have 16.7% equity versus the same range on the flop, so it’d be fine to fold, even though 44 is a stronger hand than Ace-Ten in absolute terms. So yes, when we think about this scenario, sometimes we are ‘priced in’ and sometimes we’re not, but it remains an over-simplification of the ‘equity vs range’ concept – it ignores the significant difference between a 3% positive gap and a 5% negative one.

Here’s a polar opposite example, a fairly ludicrous one. Imagine you’re heads-up in a huge tournament with lots of entrants and tons of chips in play – one of those ones where the heads-up chip-stacks are something like 10 million chips each. You have pocket deuces. You get to the flop, and it comes Ace-Ace-Deuce – jackpot! A full house.

The villain bets, you raise, and he calls. Then the turn comes another Ace – disaster! Your hand gets counterfeited, and is now almost worthless. The villain checks to you, and you check back. Then the river, the fourth Ace! What a bizarre runout. The board reads A-A-2-A-A. You have 22, so you’re playing the board with quads and a deuce kicker.

There’s 10 million chips in the pot, and you each have 5 million behind. The villain checks to you.

You now have the nut low, so you decide you need to bet. You’re about to click the all-in button to really go for it with a pot-sized river bluff, but your finger slips, and you end up somehow betting 4,999,999 chips. No big deal, you figure, he’s probably folding anyway. But he doesn’t! He actually check/shoves! What a weird spot this is. It’s only 1 chip for you to call, and the pot is 19,999,999. You’re literally getting almost twenty million to one pot odds (disclaimer: I recognise that this is absurd and would never actually happen!). But should you call?

Heck no! Why would you? You’re playing the board with quads and a deuce kicker. You might be thinking to yourself right now, “isn’t it worth calling just for the very rare occasion that we chop the pot?” Well, no, because we have two of the deuces in our hand, and one is out there on the board. So, the maximum number of deuces the villain can have is one, which means at least one card in his hand must be higher than a deuce, giving him a higher kicker with his quads.

I’ve picked this example because it’s one of the very few instances where we can be absolutely, positively, 110% certain that we have no more than 0% chance of winning any of this pot.

In this example, our level of certainty that we were beat on the river was absolute. We didn’t need a margin for error.

If we even had 33 here instead of 22, we could perhaps call, because maybe the villain has 22 more than 0.00000005% of the time (although even that’s unlikely since it would require him calling it off with the nut low – but then again he probably does misclick-shove at least once in 20 million times). Now, the difficulty in this hand would come if it played out the same way with a hand like JJ, and we made a normal-sized river bet – say the villain check/shoves the river and we’re getting 7 to 1 instead. We’d then have to decide whether we thought he could be bluffing with a ten-high hand or worse more than 12.5% of the time, which is a much tougher decision.

Obviously this could be a fold or it could be a call depending on the opponent, but either way, it highlights the value of improving your range analysis skills, in order to make these decisions easier. You can’t avoid the tough decisions altogether, but if you’re thinking clearly about opponents’ ranges all throughout the hand and doing your best to calculate your pot odds as precisely as possible in-game, then you’ll be able to avoid those spots where you say to yourself “well, I’m getting 4 to 1, guess I’m priced in to call” and see the villain turn over the nuts every time.

So, next time you’re in one of those spots where you’re unsure whether to call a bet, don’t let the obscure concept of being ‘priced in’ cloud your thinking. Eradicate it from your poker vocabulary. It’s not entirely useless, but it ignores the complexity of the concepts at hand – ranges and equity, the two key tenets of the entire game of poker – and it encourages us to neutralise our own edge by shrugging our shoulders, calling it off and leaving the rest up to variance. Keep learning what you can about those two concepts and you’ll find your decisions get easier and easier.