Asymmetric Payoff

Asymmetric Payoff is when the downside is limited, but the upside is unlimited.

Asymmetric Payoff is more profit than loss.

An asymmetric payoff is an outcome that resulted in a higher reward than the risk it took to achieve it.

An asymmetric payoff is when the possible results of an investment strategy has a higher upside potential than the downside risk.

We can set up an asymmetric payoff using listed options or by applying a stop loss.

Asymmetric Payoff

What is an asymmetric payoff or asymmetric investing?

An asymmetric payoff may refer to the probability or potential or expected outcome of a trade or the actual outcome of the trade of investment.

Asymmetric payoff is the upside potential is greater than the downside loss.

Asymmetric payoff is the upside potential is greater than the downside risked. For example, you risked $1, but earned $2. Or, you expect to earn $2 when you risked $1.

Asymmetric payoff is the upside probability (a mathematical calculation) is greater than the downside loss or risk.

Asymmetric payoff is the outcome of a trade has more profit than loss .

As you can see in the graph below, asymmetry is preferred over symmetry: (symmetry is when your risk and reward is balanced, so the outcome for profit is the same as the outcome for loss.

Asymmetric Payoff and Symmetric Payout

For information about ASYMMETRY® visit Shell Capital Management, LLC 

For more information, see:

Asymmetric Investing

Asymmetric Risk

Asymmetric Trading System

Asymmetric Risk / Reward

Asymmetric Return Distribution

Asymmetry Ratio

Positive Asymmetry

Absolute Return


ASYMMETRY®, ASYMMETRY Investment Program®, ASYMMETRY Capital Partners®, and Global Tactical Rotation® are registered service marks of Shell Capital Management, LLC

2 responses

  1. Pingback: Why Index ETFs Over Individual Stocks? « Asymmetry Observations

  2. Pingback: Earnings season is tricky for momentum growth stocks « ASYMMETRY® Observations

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