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

The term zero sum game does not mean what some of you people think it means. The concept refers to the transfer of wealth. When a trader enters into a position (any position) wealth is transferred either to the trader from someone else or from the trader to someone else. Such wealth is not created out of thin air, it transfers from one party to another. Commissions and Fees work the same way. Wealth simply transfers from one (or several parties) to another ad infinitum.

http://wfhummel.cnchost.com/misconceptions.html

"Where does all the money go when stock prices plummet?

This question mistakes the monetary value of stocks for money itself. Stock prices simply reflect the current market value of the shares. At the end of the day, buyers own more shares and less money, while sellers own fewer shares and more money. Their aggregate financial wealth may be higher or lower, but the total amount of money they own remains unchanged."

Total amount of money remains unchanged...

Hence ZERO SUM GAME.

- Spydertrader
 
trend guy.....
oportunity cost has nothing to do with zero-sum.....yes if i bought a house fo 100k and sold it for 200k and it was sold by the new owner a year later for 300k......i have not have profited the whole 200k i could have but i did profit 100k...and the guy i sold it to profited 100k......but that does not mean the new owner has lost 300k.........he is at break even......soooooo profit 200k...loss 0k......again...just like the stock market.....not a zerosum game....

and why ask the question......to help these people who keep posting replys that include the statement the stock market is a zero sum game to realize it isnt...never has been....never will be....

cause we are all here to learn.......
 
shit....then came decimilazation...

could of...would of...

we do not see the market...



Quote from DynamicReplic8r:

No, the MM is part of the market too. He is buying and selling just like you (only on a shorter time frame). He takes losses sometimes to my friend. If you add up all the profits and subtract all the losses of all market participants it is not negative sum (other than commissions. I'll give you that).
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Quote from ElectricSavant:

Your Broker/specialist/marketmaker is like a real estate agent...pulling a percent to provide you with a market, thus reducing the net aggregate..

You lose...it a losers game...an edge may get you the time you need..

Think of the dealer in Vegas pulling the 10% in each pot...(he gets tips too)
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It's all how you frame it... I believe if I pay $5K real estate commission and someone gets paid the $5K, the nets out at zero.
 
zero sum to me only means the money can be accounted for; to net out to zero. Fairness is a different issue... are you down the commission when you enter; definitely; can I track where it went to net out zero; definitely.
 
this is aeasy discuission. a family of 4's living expenses is about 60-80k a year. unless you can make 100k or more its a zero sum game. you'r emuch better off making 70k a year and investing your money. as a trader your jsut paying your living expenses and enver getting ahead. trading to most is just a dream. i'd say for 97%of trader traidng is a short term zero sum game as they can't stay ahead of there expenses
 
So you just reduced the quote with a percent of 5K...

My point exactly..

money is Money and its transfer effects the market velocity.

This is negative sum...as the person in the middle pulls...which not only DIRECTLY effects this, but INDIRECTLY>>>




Quote from trend_guy:

It's all how you frame it... I believe if I pay $5K real estate commission and someone gets paid the $5K, the nets out at zero.
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do you understand that economies GROW wealth

please compare the real wealth of the lowest income quintile NOW vs. 100 yrs ago.

(or any income quintile for that matter).

where does this wealth come from? does it come from other people (which it would have to if it was a zero sum game).

of course not.

this is so basic Econ 101, i can't believe anybody would argue the zero sum game.

our economy grows wealth by increased economy of scale, innovation, etc. for example, it takes far less man-hours/acreage/resources to grow a bushel of corn now, vs. 100 yrs ago. this frees up manpower for other tasks.

when i am trading YM on an intraday basis - THAT is a zero sum game. because for every winning trade, there is a losing trade. that is not true with the economy, or stock market, as a whole.
 
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