Pot odds are the ratio between the size of the pot and the size of the call you will have to make to stay in the hand and see the next card. This can also be looked at as a percentage, where the pot odds are the percentage of chips to call divided by the total size of the pot.
For example, if there is a pot of $20 after the turn and you are forced to make a call of $5 to see the river, then your pot odds would be 25%.
Using pot odds to your advantage
Continuing with the example from above, in order to call the additional $5 you should either feel you already have the best hand, or (this is where the pot odds come in) you should be able to draw to the best hand more than 25% of the time. To elaborate on this, if you have 4 cards to a flush after the turn, the odds of the next card being the suit you need is roughly 20%. (You can calculate this by dividing the 9 remaining cards of your suit by the 46 remaining cards in the deck. You know the values of 6 of the cards so you must subtract these cards from the total deck.) Therefore in this situation making the call of $5 to see the river is the wrong play because you aren’t receiving the right pot odds to make the draw worthwhile. (This example does not include implied odds which we will get into in a later post.)
The amount of cards left matter
Now consider that you have four to a flush with a bottom pair and you are putting your opponent on top pair. In this situation you have 9 cards that would make you a flush and 4 additional cards that would make you either 2 pair or a set, each of which you feel would be the best hand. Therefore, in this situation you have a 28% chance to catch one of your cards on the river to give you the best hand. In this situation you should call the bet of $5 because your 28% chance of making the best hand is greater than the 25% pot odds that you need to make the call.
Call or fold?
Here is one more detailed example. You have (7h, 8h) in your hand and the board shows (6C, 9D, KH, 2H) after the turn. The pot was $100 and your opponent bets another $50, making the total pot $150. You are putting your opponent on a big hand like top pair, two pair or a set. This is when you have to take a look at your pot odds to see if you should make this call. The flush draw gives you 9 outs and the open ended straight draw gives you another 8 outs. This means that your odds of making a hand that you feel will win the pot are 37%. The call you have to make is only 33% of the pot, which means that given your pot odds of 37%, you should definitely make this call.