zero sum game?????????????

what we have here is a typical situation of 2 groups of people totally misunderstanding each other:

1) stock market in respect of contracts/shares exchanged is a zero sum equation.

2) If your are commenting in respect of participants in the stock market it can be one of 3 - positive, neutral or negative.

The question has not been worded correctly.
 
Quote from DynamicReplic8r:

Nice try. When you trade a spread you make money in one contract. The person/people that are on the other side of that trade lose money. You lose money on the other leg, and the person/people on the other side of that trade make money.

The same goes for arbitrage.

Here is an example of how it could not be zero sum. You own one contract someone else is short that contract. When the price goes up one tick, you make $30 and the other person only loses $25 (on that trade...forget about what other positions they have..it's irrelevant). That's just not the way contracts are designed.
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That is what is happening between China and the US. So inter index spreads also have to look at currency manipulation. Thus non-sum zero.
 
Quote from 1000:

That is what is happening between China and the US. So inter index spreads also have to look at currency manipulation. Thus non-sum zero.
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I'm sorry, but that is not was is happening in China
 
I am sorry if this has been mentioned already...but isn't the most obvious and clear case of zero sum in the stock market, when you short sell a stock? Then you have two sides to the transaction and what the shorter makes the buyer (from him as a new buyer) loses. Conversely, what the buyer makes, the shorter loses?

Other than that, seems pretty clear the stock market is not zero sum.

But, that opportunity cost stuff....while it does not actually have to do with the zero sum argument, is still frustratingly true just as a trading comment. Particularly for a position trader or anyone with a high win ratio. Last year, just one fucked up trade, that i sold waaaay too early would have been more than double ALL of my actual net losses for the entire year! Now i was still profitable, but that still drives me mad, total ineptitude on my part. Also, this is going to depend quite a bit on what sort of trading you do, super high frequency with a lower win ratio may not have this problem as bad. I guess though, this is really a discussion of EXITS :) IMO, one of the most challenging aspects of trading.
 
I make my living on those that lose a lot of money.
I practically finance every losing trader out there.
I'ts because of them that I'm able to be profitable in lending money. Because I'm a Hard Money Lender I can lend without taking into account how messed up a traders credit report is, or even verifying if they trade full time or not.

So I like the zero sum game of the markets because when people need money to invest or if they have lost money and need to borrow some more - THEY COME TO ME!



:D
 
Quote from Aapex:

So I like the zero sum game of the markets because when people need money to invest or if they have lost money and need to borrow some more - THEY COME TO ME!
:D
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Are you fully invested or do you also gain from interest, and currency diff. Did you see the ECB move coming!
 
I think it was Buffet who said that investors put more money into railroad stocks than they took out of them. In other words, if you add all the money that was made from railroad stocks and substract all the money that people paid for them, you get net negative. You don't even get zero

This is true for every industry. It has already happened with the airline stocks. It is happening with the auto stocks. 99% of the companies eventually go out of business. When they do, it is not hard to compute the aggregate profit over time. It is definitely negative, because every company bankcrupts at the price of zero. But no company IPO's at zero. If there had been secondary offerings then the aggregate net loss is even larger.

Stock market's function is NOT for people to make money. It is similar to lottery (but with a better chance): It gives people hope for winning a lot of money, in return it takes money from people and put it into economic activities - losing most of it in the process.
 
Quote from DynamicReplic8r:

Who didn't? That was a non-event.
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Why the sell of in treasuries soon after? If it was a non-event then there should have been a more linear sell off occuring over the past month.

Was this a knee-jerk reaction to the European selling, or going back to convexity, was someone trying to play hangman?

However, IMHO, could it have something to do with the Euro having to be kept around or above the 1.20 level?
 
Quote from james_bond_3rd:

I think it was Buffet who said that investors put more money into railroad stocks than they took out of them. In other words, if you add all the money that was made from railroad stocks and substract all the money that people paid for them, you get net negative. You don't even get zero

This is true for every industry. It has already happened with the airline stocks. It is happening with the auto stocks. 99% of the companies eventually go out of business. When they do, it is not hard to compute the aggregate profit over time. It is definitely negative, because every company bankcrupts at the price of zero. But no company IPO's at zero. If there had been secondary offerings then the aggregate net loss is even larger.

Stock market's function is NOT for people to make money. It is similar to lottery (but with a better chance): It gives people hope for winning a lot of money, in return it takes money from people and put it into economic activities - losing most of it in the process.
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lol the post in here are getting worse and worse. The stock market is a negative sums game now haha, everyone get your money out of the stock market, its not for people to make money. Seriously where did you get your numbers? Could you provide us with some references.


This is what I found:

2004 total US IPO offers raised $11 billion
http://www.altassets.com/news/arc/2006/nz7975.php

2004 total global IPO offers raised $124 billion
http://www.ey.com/global/content.nsf/International/Services_-_SGM_-_Global_IPO_Survey_2005

$213.6 billion in dividends paid during 2004 by S&P 500 stocks
http://www.iht.com/articles/2005/01/04/business/dividend.php

The S&P 500 alone almost paid out twice the total amount of all global dividends paid during 2004.
 
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