ICM Explained: Why Tournament Chips Are Not Money

In a cash game, a chip is a dollar. Win 3,000 chips and you are 3,000 richer. Lose them and you are 3,000 poorer. Every calculation in the other Lab Notes posts rests on that symmetry.

Tournaments break it. You cannot cash out your chips, and prize money is paid by finishing position, not by stack size. That one rule change means the chips you might win are worth less than the chips you might lose, sometimes far less. A call that is clear profit in a cash game can be a disaster on a tournament bubble.

The tool that measures this is called ICM, the Independent Chip Model. This post explains what it does, walks a bubble hand through it, and shows why it makes good players fold hands like ace king.