To those that say trading is a 0 sum game...

Trading is a zero sum game, assuming that your sum is the totality of assets (incl intangible). An economy isn't a zero sum game, given there's productivity advances (TFP), population growth, etc.
 
Stocks don't go up forever. And stocks that do go up, don't go up in a linear fashion.

Plenty of buyers at every new high who sold near the bottom of the ensuing pullback.

Shorts don't create losses. Human psychology creates losses. People enter the market when it looks most favorable. And 9 times out of 10, that's when the market corrects. Even if a stock appreciates 50$ in a single day, plenty of traders will have bought the top and sold the bottom. Same with investors. They buy stocks when they look hot, suffer a hard pullback, dump, then the stock recovers on to new highs.
 
Quote from Martinghoul:

Trading is a zero sum game, assuming that your sum is the totality of assets (incl intangible). An economy isn't a zero sum game, given there's productivity advances (TFP), population growth, etc.
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OK. So on Sept 11, when besides the loss of life, the stock market fell, assets were destroyed, where was the balanced gain? There are not an equal number of longs and shorts. There was absolute loss of capital.

If a stock reduces estimates and is trading 20% lower the next morning, who makes money to offset the reduction in the value of the stock?

Gold opens up 2% one day, there is not an equal number of longs and shorts. Someone owns a gold mine. Someone owns gold jewelry. It's not a closed system.

Please show me one example.
 
Quote from olias:

futures trading is a zero sum game. Stock trading is not. At least that's how I see it. In stock market the company sells it's shares. If the company performs well and the company keeps increasing in value, everybody wins basically.
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exactly...... although the seller of the IPO unit of LKND may be kicking himself in the ass 4 years from now or maybe not :D

its all a negative sum game when commission, spread and heartburn are factored in....:D
 
I became very wealthy when Lehman collapsed-- along with many others.

The same thing happened to others during each of the events you state.

However, trading us negative sum due to costs commissions and fees.
 
Quote from ElCubano:

exactly...... although the seller of the IPO unit of LKND may be kicking himself in the ass 4 years from now or maybe not :D
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agree. the 'loser' is the company who sold their share at a lower price than they could have, but in my eyes they really are not a loser. I guess it's debatable whether we want to view that as 'zero sum' or not. I don't consider that zero sum. I mean, hypothetically anyway, a stock could keep going higher and higher. Everyone who participates could profit, hypothetically. So again I say stocks are not a zero sum game
 
Quote from intradaybill:


I wonder why some people have such serious problem understanding such a trivial concept.

Gee...
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You might be right, and have a great understanding of the markets but, if I may say so you did a pretty poor job explaining it. It was a less than impressive answer for someone who is so condescending
 
Quote from Dalmation:

I became very wealthy when Lehman collapsed-- along with many others.

The same thing happened to others during each of the events you state.

However, trading us negative sum due to costs commissions and fees.
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It was still a net loss. There were not more shorts than longs. There are never more shorts than longs. And if that was possible for a short period of time, then it is still not equal.
 
Quote from rmorse:

Futures would be a zero sum game if there were no hedgers or spreads, or inter market spreads. But there are. If I own a farm and hedge my crop in the futures markets, we can both make money.
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as a hedger you might make out overall (cash and futures), but you and the person who's on the other side of your futures trade can not both make money on the futures trade. right?
 
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