Asymmetry Payoff
Asymmetric Payoff is more profit than loss.
Asymmetry of a trade (asymmetric payoff) is when the downside is limited, but the upside is unlimited.
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 isthe upside potential is greater than the downside loss.
Asymmetric payoff isthe 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 isthe 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.
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