Why Traders Need To Focus on Asymmetric Returns 1

I can calculate the motion of heavenly bodies, but not the madness of people, Sir Isaac Newton Quote

Hang around traders or investors long enough and you will hear the phrase “asymmetric returns”.

While it sounds suspiciously sophisticated and impressive, “asymmetric returns” aren’t, like a lot of other financial jargon, pure marketing guff. They are, in fact, a reflection of not just how markets distribute outcomes (returns), but also how we can best profit from them. 

Which begs the question, what exactly are asymmetric returns, and why are they so important?

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