Asymmetric payoff | Glossary

Definition :

This is an function graph that shows a positive asymmetric payoff. It may also be a negative asymmetric payoff, but we mostly use the term “asymmetric payoff” to speak of positive asymmetry Or  The set of possible results of an investment strategy where the upside potential is greater than the downside risk. Derivative contracts called “options” are the most common instrument with asymmetric payoff characteristics. Hedge funds that employ this kind of investment strategy include Universal Investments, A North Investments, Pershing Square Capital Management, and others.

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Further Reading:

Product Development Flow by Donald G Reinertsen.

 

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