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Asymmetric Investment Returns

Asymmetric Investment Returns is a blog authored by Mike Shell since 2006, covering topics about asymmetric investing and trading for asymmetric risk/reward in pursuit of asymmetry.

Asymmetric Insights from the March 2025 Dispersion, Volatility, and Correlation Report

April 1, 2025

Discover asymmetric investment insights from the March 2025 S&P Dispersion, Volatility & Correlation Dashboard. Learn how elevated volatility, low dispersion, and rising global correlations create opportunities for volatility reversion trades, convex option strategies, and portfolio-level asymmetry. Explore how small caps, emerging markets, and tactical hedging may offer defined-risk setups with exponential upside.

How Flow and Positioning Data Can Reveal Asymmetric Opportunities

March 31, 2025

Institutional fund flows, futures positioning data, and ETF rotation trends may help reveal where market participants are concentrated—and where asymmetric opportunities could emerge. By analyzing institutional fund flows and futures positioning across asset classes, we may identify regime shifts, crowded trades, and potential setups offering convexity, optionality, and favorable asymmetry with predefined risk and exponential upside.

The Illusion of Asymmetry in Options-Based Buffered, Overlay, and Defined Outcome ETFs

March 21, 2025

Many options-based funds like Buffered, Overlay, and Defined Outcome ETFs promise downside protection with upside potential—but most fail to deliver true asymmetry. Here's why.

The Fed FOMC Meeting and the Illusion of Asymmetric Insight

March 18, 2025

The Federal Open Market Committee (FOMC), which sets U.S. monetary policy by adjusting interest rates, unanimously voted to keep the fed funds rate in the 4.25%–4.5% range in March. The most notable change in the post-meeting statement was the addition of a new clause: “Uncertainty around the economic outlook has increased.” It's an illusion of asymmetric insight.

The Stock Market Risk/Reward Asymmetry Has Shifted

March 9, 2025

The stock market is a constant battle between buying pressure and selling pressure, and recently, that battle has shifted in a meaningful way. After a strong rally earlier in the year, we’ve now seen a notable change in the risk/reward asymmetry. Markets don’t move in a straight line, and shifts in trend strength often signal the potential for new opportunities—or new risks.

Global Fixed Income Divergences and Asymmetric Positioning Opportunities

March 7, 2025

The global fixed-income landscape is at a key inflection point, with notable divergences emerging across major bond markets. While U.S. Treasury yields show signs of trend exhaustion, other developed market bonds are stabilizing at key technical levels. These shifts create asymmetric opportunities for tactical investors who focus on structuring trades with predefined downside risk and significant upside potential.