Is cash out worth it?

[radubalaj]

As you probably know, some sites like Pokerstars allow you to cash out in all-in situations (for cash games), for example when the players get it all in preflop.

I recently got some interest into it as I hear it's supposed to lower your variance. Basically you get your expected value minus a small fee, smth like 1%.
This is because of a lot of bad beats in the last days.
And good thing that I did just start to cash out, just lost AA vs JJ and QQ vs 1010 today. However, the math of the cashout does not make any sense to me.

I feel like I am getting much less than I should.

Let's assume both players get it all in preflop. One has Aces, the other has an underpair. So equities are roughly 80/20. I am excluding rake for the sake of simplicity.

I would expect 80% EV to mean I put in 10 bucks and get back 8 (10*0.8=8).
However, if I cash out I get 6 (again rough aprox without rake considerations which complicates things a bit).

This is because Pokerstarts calculates your equity against the entire pot. So it calculates the percentage out of 20. 20*0.8=16

So you cash out 16, meaning you are left with 6 dollars of profit. Which means 2 dollars less than the real EV I would expect. This is obviosuly a huuuuuge difference long term.

Am I going mad due to isolation or is this simply rip-off?

[Dilly]

Not sure about this process, but why pay a premium for your EV to lower variance? My minds in a similar place as with running it multiple times, it's unnecessary if you're properly bankrolled and playing sufficient volume

[radubalaj]

In theory, it is not a big premium. 1% is the cash out fee.

You would use it cause it's never fun to lose 20% of your bankroll due purely to bad luck as I have experienced in the last days (would have been worse if I did not started to cash out today).

But you are right, at the end of the day, if you put in enough volume and are probably bankrolled, that should not be much of a problem.

[Looch]

There is another drawback with the cashout... if you are the other guy, say with the KK and the AA guy takes his cashout and takes the 80%. Then that leaves only 20% left for you even if you do happen to suck out. So you have to be ready to take the cashout as soon as the other guy does. That’s why they usually wait till the very end just to mess you up.

so yes, normally don’t take it but if the other guy does first then so should you since the most you can win is your equity anyway, right? I hope they remove it.

[LondonImp]

This is totally wrong.

Regardless of whether or not your opponent cashes out, if you win the pot you win the full pot (minus just the rake).

[Looch]

Wow, that’s surprising, i was convinced of the opposite, I’ll try to capture the hand when I see it occur again,
thanks.

[LondonImp]

Sorry Looch , re-reading my comment it came across as rather rude. It wasn't intentional, I was just in a rush.

The poker provider offering the cash-out option makes a small profit on average when anyone cashes out, as the price they offer is ever so slightly less than what you stand to win based on your equity. These tiny edges add up for the site in the long run (exactly the same as our tiny edges add up over the long-run in poker.

[Looch]

Well I’ll be......
I had to play for quite some time tonight waiting for it to occur but it did.
but the pot math doesn’t add up still.. the first guy took his cashout which was about 60% pot and the other guy, the underdog, held his ground and sucked out and won the full pot value before the cashout offer.
so the provider , in this case, PStars, must put up the rest. Like you said, they make much more with the rake and fees anyway.
but I saw it .... and it is exactly what you described,
thanks again, no more from me on this,,