XIV is an ETN, an entirely different animal than an equity. Many pro traders won't touch ETNs due to the counter-party risk. Like playing with hand grenades.
Are markets zero sum game?
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XIV is an ETN, an entirely different animal than an equity. Many pro traders won't touch ETNs due to the counter-party risk. Like playing with hand grenades.
True, but for the hedgers there is no real "loss", because they simply use the Forex or the Futures markets as an insurance mechanism.
Thats what google has...Depends on who you ask. Ask Jim Simmons
Investing is often a zero sum game. Each trade has two sides (buyer and seller), and you want to be on the profitable side of that trade if your goal is to make money. While Simons built an antifragile trading empire, he understood the importance of keeping winning strategies secret. As soon as information leaks and other traders begin using your strategy, it stops working.
What is fundamentally different between used car market in Guadalajara compared to New York Stock Market?
Do car dealers like to buy expensive and sell cheap?
What gives value to price differences at car market?
What gives value to price differences at stock market?
Fundamentall
Fundamentally, in the Guadalajara used car market people are trading used cars for other things of value, US$, MX Pesos, however many dealers are also open to other things of value as well however this must be negotiated between each buyer and seller.
Where in the New York Stock Market, pieces of companies can be purchased or sold depending on your broker you can use different currencies, not sure if anything else of value is allowed to be traded for Stocks (AKA shares of business) you would have to consult your broker.
Both of these markets are setup as an "auction market" however you are more likely to get your offer accepted at the Guadalajara used car market as you can negotiate specifically with the buyer/seller, where with the NYSE everyone has electronic access to what the price of a share of a company is valued and how many buyers there are on the open market (with dark pools you may be able to negotiate however, you would again have to consult your broker).
The car market is very difficult, often times dealers are forced to buy expensive and sell cheap especially in certain markets, but this is really just a silly question as obviously no one in business "likes to buy expensive and sell cheap"
I am not sure what you mean "What gives value to price differences at car market" If English is not your first language, you are doing very well however ! I think what you mean to ask is what causes the price difference in the used car market?
At a car market the value, comes first from what the seller is willing to sell it at and second what the buyer is willing to pay ( as in all markets ) this can be reversed in rare situations for example, if there is an extreme shortage on necessities. however, that is still the "market" at work
again I am not sure what you mean by "whats gives value", this question could be interpreted as what makes it a good buy or sell for me in the stock market. But again I think you mean to ask what causes the price difference?
The stock market has a few more nuts & bolts than a used car market however it is still the same as any market. First a company has to account its total worth, however important, VERY IMPORTANT, is its future projections. I am not sure how its priced in on an IPO, but you can research it. So for example, you want to offer 40% of your business to sell, however you dont want 1 or 2 partners, you want to "go public", offer X amount of shares (pieces) at a determined price released to sell to anyone that has a broker or is a member of the exchange(market). Once these are on the open market, it does becomes an "auction market" and you will also see "price discovery". Basically we see what are people willing to pay for a piece of said company.
imagine your unlce buying half of your business because he believes in it, would you say he lost and you won? or you lost and he won? its a tad bit silly Id say...
I personally dont like playing poker as it is a zero sum game, I feel people who use the term "zero sum game" are long term losers in trading and try and shame people who are actually successful at it. If someone is pumping a stock than dumping it, that is different (and adults should do their DD before investing in anything) but that is not the same as trading.
As a trader if I bought a share of a company, because I believed I could sell it for more in the short term, I didnt create any losers, I added liquidity to the market, And wont be shamed into thinking otherwise.
Fundamentally, in the Guadalajara used car market people are trading used cars for other things of value, US$, MX Pesos, however many dealers are also open to other things of value as well however this must be negotiated between each buyer and seller.
Where in the New York Stock Market, pieces of companies can be purchased or sold depending on your broker you can use different currencies, not sure if anything else of value is allowed to be traded for Stocks (AKA shares of business) you would have to consult your broker.
Both of these markets are setup as an "auction market" however you are more likely to get your offer accepted at the Guadalajara used car market as you can negotiate specifically with the buyer/seller, where with the NYSE everyone has electronic access to what the price of a share of a company is valued and how many buyers there are on the open market (with dark pools you may be able to negotiate however, you would again have to consult your broker).
The car market is very difficult, often times dealers are forced to buy expensive and sell cheap especially in certain markets, but this is really just a silly question as obviously no one in business "likes to buy expensive and sell cheap"
I am not sure what you mean "What gives value to price differences at car market" If English is not your first language, you are doing very well however ! I think what you mean to ask is what causes the price difference in the used car market?
At a car market the value, comes first from what the seller is willing to sell it at and second what the buyer is willing to pay ( as in all markets ) this can be reversed in rare situations for example, if there is an extreme shortage on necessities. however, that is still the "market" at work
again I am not sure what you mean by "whats gives value", this question could be interpreted as what makes it a good buy or sell for me in the stock market. But again I think you mean to ask what causes the price difference?
The stock market has a few more nuts & bolts than a used car market however it is still the same as any market. First a company has to account its total worth, however important, VERY IMPORTANT, is its future projections. I am not sure how its priced in on an IPO, but you can research it. So for example, you want to offer 40% of your business to sell, however you dont want 1 or 2 partners, you want to "go public", offer X amount of shares (pieces) at a determined price released to sell to anyone that has a broker or is a member of the exchange(market). Once these are on the open market, it does becomes an "auction market" and you will also see "price discovery". Basically we see what are people willing to pay for a piece of said company.
imagine your unlce buying half of your business because he believes in it, would you say he lost and you won? or you lost and he won? its a tad bit silly Id say...
I personally dont like playing poker as it is a zero sum game, I feel people who use the term "zero sum game" are long term losers in trading and try and shame people who are actually successful at it. If someone is pumping a stock than dumping it, that is different (and adults should do their DD before investing in anything) but that is not the same as trading.
As a trader if I bought a share of a company, because I believed I could sell it for more in the short term, I didnt create any losers, I added liquidity to the market, And wont be shamed into thinking otherwise.
Yes, so for him it may not be a zero sum game, until it changes.
But this whole topic looks similar to the earlier topic discussed on ET, whether markets or stock prices are random.
The answer probably is not important. People who make money in the markets do not ask this question and do not care. Some may even make money from the randomness and because it is zero-sum game for others.
In terms of Jim Simmons, I believe he might’ve made money from the imperfections in Black-Scholes, so even though many people stick to BS as a basic model utilized for making certain types of bets, others may be acting as the casino and take a cut of everyone else’s “zero sum game”.
If you sell a stock at $50 (at a profit) and it drops to $5 later then there is indeed a loser: the poor guy you sold it to.
So there are losers in the stock market, even though it is not a zero sum game.
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How do you know the "guy you sold it to" is not simply a new entrant into the stock, buying your stock for $10? And what happens when the stock gets to $60? The guy who bought your stock at $10 sells it to the guy who bought it at $50, and they both make money. I know this is a simple example, but so is the whole scenario. I guess that is why corporate buybacks are necessary?
The poor guy bought the stock at $50 (from you) and now its price is $10, remember?
"... And what happens when the stock gets to $60?"
Remember that part? lol
Both the guy who bought at $10 and the guy who bought at 50 sell at 60. Mo money mo money mo money!