Term

Asymmetry

Here, a bet with a small potential loss that is known in advance and a potential gain many times larger.

Hedge Fund Market Wizards: How Winning Traders Win, Jack D. Schwager

Explained in

• Hedge Fund Market Wizards: How Winning Traders Win, Jack D. Schwager
• Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, Nassim Nicholas Taleb

  Here: an imbalance between possible outcomes, when the win and the loss differ greatly in size.

• Good Strategy Bad Strategy: The Difference and Why It Matters, Richard Rumelt

  Here: an imbalance of strengths, where one side's strength meets the other side's weakness.

• Antifragile: Things That Gain from Disorder, Nassim Nicholas Taleb

  Unequal possible outcomes: the loss is small and limited, while the gain can be large.

• The Black Swan, Nassim Nicholas Taleb

  when the possible gain and the possible loss are wildly out of proportion: you risk little but stand to gain a lot (or the reverse)

All terms