[jojobinks]

Originally Posted by Diablo_Rojos

Seems to me like insurance is a sucker bet.

nah, it's the opposite of a sucker bet, if the price is right. i read the thread, but was mostly confuzzed, despite the fact that i know what insurance is.

here's my version of the concept. in any all-in situation, you have an EV, right? but variance dictates that you'll never hit that EV, b/c the most likely situations are that you win the entire pot or lose the entire pot. insurance, if the right price is given, should end up with you winning exactly your EV.

example:
board is
all in.
me:
diablo:

Board: Kh Td 2s
Dead:

equity win tie pots won pots tied
Hand 0: 72.626% 72.63% 00.00% 719 0.00 { KdKs }
Hand 1: 27.374% 27.37% 00.00% 271 0.00 { QdJd }

with $100 in the pot (isn't that convenient?), my EV is $72.62, but we tie 0% of the time, so i can only win or lose $100

so, i'm about 2.651 favorite and bet $27.38 (total pot-my EV) on me to lose.

now, only two things can happen:
i win the $100 pot but lose the side bet -$27 = $73
or
i lose the $100 pot but win the side bet for $72.58

whatever happens, i make exactly what i was "supposed" to make in ev.

finally: the trick, of course, is to get the right price. hellmuth is famous now for getting a bad price on his insurance. on this hand, i got it right. all i needed was a calculator!

[BigBlue]

What they said... all about the odds.


I wouldn't bother in a home game, for the same reason that they give the guys on HSP a hard time... usually 1 guy is interested, and the rest of the table sits with thumbs in rears waiting for calculations to be made.


One person is usually getting the best, and one the worst (rare to get exact odds). Only reduces variance, easier to run it twice to cut down the volitility of the odds/cards/stack swings.

[jojobinks]

Originally Posted by Captn_All_In

So basically whenever I see the opportunity I want to offer it up for someone else (meaning I will cover someone) but I don't want to ask someone else when I am the one who is all in??

no...this is the same as running it twice, or three times. more accurately, it's like running it a million times, where you run the board, shuffle and run it again, each time for a tiny fraction of the pot. what it does is reduce variance to zero.

so if i was on the draw in the hand i just posted above, taking insurance is fine too. it would insure i win my fair share of the pot all the time ($27) instead of winning or losing the entire thing. traditionally the guy in the lead offers it, but there's no real mathematical reason why.

[Captn_All_In]

jojo, thanks for the effort, I really appreciate the detailed example!!

I gotta agree with you BigBlue, as much as I love this idea I think that explaining it to the regulars will be a stretch. Most of them understand how to run it twice so I might just push for that to happen a little more often. But who knows I might get a flash of an idea when the time is right and offering insurance might happen more than I want it to!!

[Captn_All_In]

Okay so then what is the easiest way to offer up odds that can be figured out at a table without using a calulator and or a slide rule??

Keeping a computer running would be an option, a very tiny one at that.

Originally Posted by jojobinks

no...this is the same as running it twice, or three times. more accurately, it's like running it a million times, where you run the board, shuffle and run it again, each time for a tiny fraction of the pot. what it does is reduce variance to zero.

so if i was on the draw in the hand i just posted above, taking insurance is fine too. it would insure i win my fair share of the pot all the time ($27) instead of winning or losing the entire thing. traditionally the guy in the lead offers it, but there's no real mathematical reason why.

[jojobinks]

Originally Posted by Captn_All_In

Okay so then what is the easiest way to offer up odds that can be figured out at a table without using a calulator and or a slide rule??

Keeping a computer running would be an option, a very tiny one at that.

well, you could estimate. or you could just run it thrice. it's the same thing without the calculations.

[jojobinks]

here's the quick version, though, if you wanna do it.

figure out how what your equity is (% of time you win * the pot).
your equity /his equity = your odds to win.

the total pot - your equity is what you want to wager. the price is your odds to win.

showing that work
in the last example i gave...my equity was 73% of the $100 pot.
73/27 = 2.6:1

so i have someone lay me 2.6:1 for (totalpot-myequity) = $27

as easier example. $100 in the pot preflop, my AA v his KK
we KNOW i'm about 80%.

so i ask you to lay me 4:1 for $20. bada bing bada bang.

[Captn_All_In]

You know I will probably get laughed at when I tell one of the guys I want to run it three times!!! I can't wait to see the looks on their faces when I tell them I am serious!

Originally Posted by jojobinks

well, you could estimate. or you could just run it thrice. it's the same thing without the calculations.

[jojobinks]

Originally Posted by Captn_All_In

You know I will probably get laughed at when I tell one of the guys I want to run it three times!!! I can't wait to see the looks on their faces when I tell them I am serious!

triple the stakes at your home game and they'll be amenable to the idea in a hurry. seriously, if you're playing well within your means it's one thing, but when you get it in with AA v KK for your mortgage payment it's a different story.

[jojobinks]

oh, one more idea! forget about insurance. figure out your equity and offer to chop the pot.

example: AA v KK in a $3k pot

offer to take $2400 and give him $600. this is essentially the both of you taking insurance.