Reading the risk premium

Under ICM you need more equity than chips alone suggest. That extra is the risk premium.

The steeper the payout jumps, and the more you lose by busting, the larger it gets.

Look at all three numbers together each time: chips, ICM, and what you actually have.

• risk premium

  The extra equity you need before calling once prize money is counted. It grows when busting out costs you a lot and the payout jumps are steep.

• ICM

  Independent Chip Model: a way of turning chip stacks into expected prize money. Doubling your chips does not double your prize, which is why chips and money can point in opposite directions.

• the bubble

  The point where one more player must bust before everyone left is paid. Pressure peaks here, and so does the risk premium.

20 hands or more, with an optimal rate of 60% and average EV loss no worse than 0.15BB