Skewness Of Returns is essential for traders and investors as it provides deeper insights into the nature of return distributions beyond simple averages and volatility. Many trading strategies, particularly in options and leveraged trading, have non-normal return distributions, making skewness analysis crucial. Ignoring skewness can lead to underestimating extreme losses or gains, affecting capital preservation strategies. It also helps traders identify whether their risk exposure is more prone to tail-risk events.
