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The outage probability limit is a fundamental and achievable lower bound on the word error rate of coded communication systems affected by fading. This limit is mainly determined by two parameters: the diversity order and the coding gain. With linear precoding, full diversity on a block fading channel can be achieved without error-correcting code. However, the effect of precoding on the coding gain is not well known, mainly due to the complicated expression of the outage probability. Using a geometric approach, this paper establishes simple upper bounds on the outage probability, the minimization of which yields to precoding matrices that achieve very good performance. For discrete alphabets, it is shown that the combination of constellation expansion and precoding is sufficient to closely approach the minimum possible outage achieved by an i.i.d. Gaussian input distribution, thus essentially maximizing the coding gain.