Asymmetrical Risk/Reward

An Asymmetrical Risk/Reward is an imbalance between the risk and the reward.

Asymmetric Risk Reward

Asymmetric Risk Reward Positive Asymmetry

A positive asymmetrical risk/reward occurs when the potential or realized reward is greater than the potential or realized loss.

Investors Seeking Asymmetric Returns are looking for a position with more potential for profit, less potential for loss.

When we speak of asymmetrical risk/reward, we typically mean it is a positive one. But, an asymmetric risk/reward can also be negative.

Asymmetric risk is the risk an investor faces when the gain realized from the move of an underlying asset in one direction is significantly different from the loss incurred from its move in the opposite direction.

Asymmetric reward is the reward an investor may achieve when the gain realized from the move of an underlying asset in one direction is significantly different from the loss incurred from its move in the opposite direction.

See also:

Asymmetric Return Distribution

Asymmetric Risk

Asymmetric Return Distribution

 

For more information, see:

Asymmetric Payoff

Asymmetric Investing

Asymmetric Risk

Seeking Asymmetric Returns

Asymmetric Trading System

Asymmetric Return Distribution

Asymmetry Ratio

Absolute Return

Positive Asymmetry

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s