"But 7% of gamblers do win, almost as good as the 10% of daytraders." That's a commonly stated number which has little or no basis in fact. No one knows what the number is. Whether trading is a form of gambling or not depends on whether said "trader" has done the work to develop a viable methodology and the discipline to trade it.
Zero-sum game.
- Thread starter Risepoint1879
- Start date
Y'all have mistaken "matched" trades with those of a market maker.
In the later, the game is zero-sum. The aggregated cost of a MM's NET INVENTORY determines if a bid and/or ask price results in profit, loss, or breaking-even. MM's carry NET positions, which may also include option and other derivative positions, transactions, or relationships. NET MM positions can be carried for INDEFINITE periods of time with second-by-second cost basis adjustment.
This is significantly different than a matched trade, customer to customer.
In the later, the game is zero-sum. The aggregated cost of a MM's NET INVENTORY determines if a bid and/or ask price results in profit, loss, or breaking-even. MM's carry NET positions, which may also include option and other derivative positions, transactions, or relationships. NET MM positions can be carried for INDEFINITE periods of time with second-by-second cost basis adjustment.
This is significantly different than a matched trade, customer to customer.
Yes, that.
Zero sum needs to use an indexas a bench mark! Making 10% doesn’t mean you won if the index goes up 15%. That’s what zero sum means. The amount of over performance equals the underperformance.
And this is still kinda ok if we only have retail traders try to take money away from each other. Problem is retail guys are undereducated and under equipped and are mostly taken to the cleaners by the pro guys.
So if you just look at the retail group. It’s a massive negative sum group. Brokerage data confirms that.
And this is still kinda ok if we only have retail traders try to take money away from each other. Problem is retail guys are undereducated and under equipped and are mostly taken to the cleaners by the pro guys.
So if you just look at the retail group. It’s a massive negative sum group. Brokerage data confirms that.
It is all a mirage. The underlying asset hasn't change. Reminds me of QE, like printing $$$.
But what do I know, I am just an amateur option trader trying to take money away from the market makers.
Nothing to do with the definition of a zero-sum game.
ZERO to do with a zero-sum game. Maybe you should work out Trader Curts oranges/dollars scene above. (Regardless of his subsequent errors, the example is colorful.) If $100 of orange futures arrive on the offer, and $100 of bid arrive to match, both leave the table with $100 worth of stuff. Period. End of story. If you want to bring arbitrage into anything, then now is a good time to incorporate the expectation of future earnings on the orange commodity --except that has already been done.
Wrong. Were that the case, no one would ever trade or enter the game. But if you arrive with $100 with of IBM, and leave with $100 worth of Uncle Sam, you are not ahead. Same in reverse for the other participant. Regardless of commodity, fixed asset, service, derivative instrument, or anything else.
This has nothing to do with a zero-sum game. This has to do with Price Theory: if both parties were fully informed and under no outside pressure to buy or sell, than the price of the orange was first $1, and second $2. End of story. Prices change, y'know.
When you bought the security for $10.50, you forked over that much in cash, and accepted that much in the security. You gain was zero. The other person gained $10.50 in cash, and lost $10.50 in the security. $21.00 worth of stuff arrived at the table. $21.00 worth of stuff left the table. What was the net? $0.
Total fiction, nothing at all to do with reality. Look up Zero Sum Game PLEASE.
https://www.elitetrader.com/et/thre...ption-traders-here.327487/page-4#post-4768478
PLEASE EVERYBODY, DO SOME HOMEWORK:
https://duckduckgo.com/?q=zero+sum+game&t=ffsb&ia=web
Enjoy it!
Have fun with it!
It is NOT hard!
Entertain your friends at parties!
Have a clue!
Last edited:
It's not Zero Sum, because retail traders put a small amount in on mass like millions of us and lose consistently, which is what the big firms feed off, they fight between each other as to how big a peice of that pie is, but there pretty much year on year making huge profits, all of them, so only place that money can come from is us