Skewness
Whether returns lean toward occasional big gains (positive) or occasional big losses (negative).
Formula
Skewness = mean((r − mean)³) ÷ σ³
How to read it
A normal distribution reads 0. Negative skew — many small gains, rare large losses — is the profile of selling insurance.
How to use it
Flags strategies whose smooth record hides rare, large losses.
Limitations
Needs a long history; a single extreme day can swing it.
Also called: skewness, skew, skew / kurtosis.