A Bullet is a offsetting long position....usually a far out of the money call, hence cheaper.......held in a traded stock while trading to allow a trader to short on a downtick at a price other than the current level 1 ask.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
When someone asks "what you do for a living" what do you answer!
- Thread starter alanrof
- Start date
Originally posted by Fohat
Let's look closer:
guy lost money ($1.10)
But, $1 gain+$0.1 gain - $1.1 loss = $0 (that's basically the zero sum, prior to commissions and fees)
Ah! But, the guy didn't Have to lose $1.10. He, along with 10 other people, could have lost $.10. Right?
So that would make it a MINUS SUM Game. Not zero sum.
-Pound
Originally posted by ANCHOR
Pound,
You left out one thing. When you shorted the stock you just borrowed it from someone else who was long in the stock. .
True. But that "someone else" could be long the stock with a profit, but you still HAVE to cover your short. He is NOT obligated to sell his stock.
-Pound
Originally posted by trader99
Yep. That's a good illustration. But, academics called it a "zero sum game" in theory. That's in a "frictionless" world(i.e. no slippage, commission, market impact,etc.) But in the real world, it ends up being a "negative sum game", b/c of the factors I listed.
I agree with you 200%.
-Pound
not for stocks for sure by a long shot. Maybe the closest one can get to a zero sum game is the futures market, but still you have to pay the vig and the spread.
But stock NO WAY. Your friendly company that floated you paper at the IPO and all the secondary offerings does not have to buy it back from you (cover). The initial and greatest transfer of wealth took place already. Paper for your hard cash.!
Josh
But stock NO WAY. Your friendly company that floated you paper at the IPO and all the secondary offerings does not have to buy it back from you (cover). The initial and greatest transfer of wealth took place already. Paper for your hard cash.!
Josh
yes, excellent point...I think that if the mass populus were to think of stocks in terms of vehicles for wealth accumulation for corporate insiders, they would stop being such passive and apathetic investors in "long term" growth...The fact that the stocks are issued and allocated in chunks of tens of thousands or hundreds of thousands of shares with a cost of 0.01 to the owners says alot...