It is our stake in the pot, either money or as a percentage, if the hand is played to showdown.

Pot Equity = Our Chance of Winning x The Pot

For example, say there's $400 in the pot and our equity is 25%.

Based on the formula above ...

Pot Equity = .25 x $400 = $100

It's important to remember that pot equity can only be calculated when we know, or have a good idea, of what our opponent has.

What do we use pot equity for?
To determine our expected return from a hand, also know as + or - EV

What is EV?