Are option trades a zero-sum game?

newwurldmn said:
options themselves are zero sum.

However the options market cam cause positive value by transferring unwanted risk to willing parties and thus lowering the risk premium in the market.
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Volatility risk premium when it is there.
 
earth_imperator said:
Are option trades a zero-sum game?
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Both yes an no. Option trades in it self is transfer of money out of someones pocket into an others pocket. But in general market sense, an option trade that captures a company's or a basket of companies sales and earnings you will get the same part of productivity output as owning a share.
 
Nah,there's plenty enough money to go around. Obviously though the experienced,veteran traders will take money away from newbies. They need the liquidity the newbies provide as well as their money. Lord knows I made my "donations" to the market my first couple years of trading. Plenty enough money to go around,it's there for the taking.
 
Every single investment is a zero-sum game, not just options. Stocks, bonds, futures, forex...everything even including mutual funds. You cannot win without the other person, somewhere, somehow, at some time losing the same amount to you. That's the nature of the game.
 
TheDawn said:
Every single investment is a zero-sum game, not just options. Stocks, bonds, futures, forex...everything even including mutual funds. You cannot win without the other person, somewhere, somehow, at some time losing the same amount to you. That's the nature of the game.
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Unlike the options and futures markets, the stock market is not a zero sum game. It is very possible for all investors in the stock market to make money, or for all to lose money. On fact, over the long term the majority of investors in the stock market make money. Note that I said INVESTORS not TRADERS.
 
TheDawn said:
Every single investment is a zero-sum game, not just options. Stocks, bonds, futures, forex...everything even including mutual funds. You cannot win without the other person, somewhere, somehow, at some time losing the same amount to you. That's the nature of the game.
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if you do T-accounting for the entire universe you are correct.

But otherwise wealth is created. When I buy Exxon and they pump oil out of the ground and pay me a dividend from those revenues, who has lost?
 
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