Poker: Folding Money (Free Money) Ratio

For the professional poker player, fewer things are more important to know than the FM ratio of a table, because it determines not only profitability, but virtually dictates the winning strategy.

FM stands for Folding Money or Free Money, as some poker professionals like to refer to it, since it is literally that, Free Money, for the knowledgeable professional player. Ratio refers to the percentage of time this Free Money occurs at a particular table.

To gain a proper overall perspective, let us look at the basic dynamics of poker. Poker is not primarily a card game, it is essentially a betting game. If you doubt this, consider what the game would be without betting. It would become a game where no player would ever fold and at the end, the best hand would automatically win each time. There would be no bluffing, semi-bluffing, betting, raising, re-raising, or strategy, and in the end, all players would win and lose about the same number of hands.

Now if you did just the opposite and removed the cards from the equation, poker would be a pure betting game where you could bluff, semi-bluff, bet, raise, re-raise and use strategy. A winner could be selected at random at the end of the betting from the players remaining in the pot. In this scenario, you will notice we have removed all cards from the game, yet we still have more of the features that makes poker interesting than poker without betting.

Once you isolate the betting portion of the game, it is easier to see clearly that what is essentially happening is that a number of players contribute money into a pot that is eventually won by one of the last remaining bettors. Notice that bettors who have discontinued betting, what we refer to as folding, are not entitled to win any of the pot or even take back the money they contributed. Thus we get the source of "Free Money". It is money donated by players who are no longer entitled to any of it.

It is essentially no different than if, while you were playing poker, strangers would pass by your table and throw some money in the pot and then leave. This "Free Money" now is extra money you will receive when you win the pot.

You might argue that it is different because the "Free Money" was not donated by a player, but put in the pot in an expectation of having some chance of winning. While this is true at the time that this player bet, it is no longer relevant once this player folds. Their contributions now becomes "Free Money" as the folding players are no longer entitled to share the pot.

So, you might say, how does knowing this become important in formulating strategy?

Before we discuss analysis and strategy, bear with us in looking at one extreme example of this application. Let's assume, for the moment, you were fortunate to be playing with a full table of the dumbest poker players in the world. Let's say their strategy was to bet and raise at random; and to always fold before the river. In other words, no matter how good their hand was, you could depend on them folding at some time.

As extreme as this example is, it serves to illustrate how we can measure the "FM Ratio" of a table. To evaluate the “FM Ratio” of the example we just gave, we would observe a number of rounds of plays to see how many rounds were folded without a final showdown. In this case we would quickly notice that all rounds were folded before a showdown. In fact, no showdown ever actually occurred. Consequently, we would assign an “FM Ratio” to this table of 100%, meaning that 100% of the rounds were folded.

Knowing this about this table, you can easily see that the correct strategy for you would be to bet all your hands to the river as you could depend upon all the players folding to you every time. You would in fact, play every hand you got to the river, as the quality of your hand would, in this case, be unimportant since you would never actually be facing a showdown.

On the opposite end of this extreme, would be a table of players, lets call them the second dumbest poker players in the world, who would always call, raise or bet to the showdown, no matter what the quality of their hands were. None of these players would ever fold.

The FM Ratio of this table would be 0% as no players ever actually fold. There would be 0% "Folding Money" or 0% FM Ratio.

Knowing this about this table of players, you can deduce that unlike the previous example, you can no longer bet every hand to the end, as you would be certain to be called or raised every time. You could also deduce that bluffing at this table would be an exercise in futility as no amount of bluffing would ever result in a player folding. You could however expect to be paid off in large pots, since every player stays in even when you play quality hands to the river.

Will you ever see one of these two extreme games? We very much doubt it. However, you will see most games fall not in the middle, 50% FM Ratio, as you might expect. Rather we have observed, that most games fall somewhere between the 20%-40% or the 60%-to 80% range. Naturally, the closer the ratios fall towards the "0%" or the "100%," the easier it is for you to formulate a correct strategy. However, even games in the "20%-40%" or the "60% - 80%" ranges offer you a distinct edge once you are aware of the FM Ratios.

We recommend you try to evaluate the FM Ratio of a game before entering the game, if possible. It will allow you to formulate your personal strategy before playing and give you a decided edge on players unaware of the FM Ratio.

Senior Poker Columnist
Janice Carroll
www.headsuppokerchampion.com

Browse through our other poker articles listed on the site:

Monetary requirement - Bankroll

Hold'em Starting Hands - Evaluation of the Hold'em Starting Hands

Computer Analysis - Computer analysis of the hands

The Bonus Factor - The added bonus factor and its consequences

Poker Position - Poker Position at the table

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