[mikechops]

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Davood sat next to me in the $1500 PL holdem event. As we were trying to figure out the correct preflop raise amount during 100-200 blinds, Davood informs the table that he plays a lot of pot limit games and you can raise to $900. He is then quieted by someone who explains to him that 100+200+200+200 = 700 and he actually stops talking for a bit.

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I apologize if this sounds stupid and I know that this is how it works as I've played PL before, but why exactly is someone allowed to raise to 700 when theres 300(100+200) in the pot?

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First you call 200, so the pot is 100+200+200 = 500. Then you can raise another 500 for a total bet of 700.