Implied odds or implied pot odds are modified pot odds used when playing a draw. They account for the fact that more money can be extracted from the opposition if the draw hits. They include the bets that the opposition will make, not just what is already in the pot.
Implied Odds = expected possible winnings : bets to be paid
Implied odds therefore include a speculative element: How much money can I extract from my opponent if I complete my draw?
Moves in No-limit games are often reckoned with implied odds, since in the best case you could win your opponent's whole stack. A typical application is calling on set value in Texas Hold'em, where a player calls an opposing raise with a pair in his hole cards, knowing that he will hit his set around 12% of the time on the flop. Since he would then have a strong hand and a good chance at winning a large pot, it makes sense for him to call. If he would only consider the money currently in the pot, he would often not have proper odds for a call.