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

Hrm. What was wrong with my painting analogy:)?

3 lithographs sell for different prices. They cost the same price to print from the printer, and the same 2 seconds to sign and number by the painter.

None of them 'cost' any differently, but they sell at 3 different prices. Who's the other side of the 'zero sum'?

The paintings have a range of X to X + Y value now and they didn't cost anyone anything, not even the painter because he only had to paint once and now has a lot of prints to sell... but they keep going up in value.

Wealth was 'created' no?
 
Stock trading like Casino Poker can be beatable games for expert player.

HOWEVER, Trading and Casino Poker are not Zero Sum Games.

In a Zero Sum Game, ALL money wagered is returned to the players. In both Trading and Casino Poker the players are charged fees to play.

"Zero Sum Game " is a term with a precise definition that can be looked up: (http://en.wikipedia.org/wiki/Wikipedia .

Even though Trading and Casino are normally beatable there are instances where unknowledgeable players are charged fees that are too high so that they will lose in the long run no matter how well they play. Fortunately, this is not the case at most firms or casinos.

Most of the arguments surrounding Zero Sum Game/Trading result because the posters both have different definitions of the term. When it comes to definitions, "I try not to roll my own".
 
depends on which markets you are talking about. futures and traded stock options are zero sum. Equities are not, as they can be awarded to directors/insiders etc who have "paid nothing" for them, but sell them on to the next guy.
 
How about a scenario where buyer A buys when a company goes public at $10.00.

He sells to buyer B @$20, who sells to buyer C @$40 who sells for $ 100 to a Group of investors who take the company private.

Where is the loser? :confused:
 
Quote from bitrend:

Nicolas Darvas at the beginning he thought it's about ecomony, serious business, wealth creation; and he lost. Until he started to find out the truth; it's just The Other Las Vegas then he started to make money.
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Yes, and he was right. :D
 
Quote from DynamicReplic8r:

For every buyer, there is a seller. Therefore, when the long makes money the short loses money.
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This is NOT necessarily true. Yes there is a buyer and seller that match each other, but what if the buyer is long term intraday. Got in at 9:45am, took a paper loss for 1 point and held on and the seller got out for a 1 point profit. At the 10:56am the buyer that bought at 9:45 gets out for a 5 point profit and etc....

Just because you profit for a 1-2-3 and etc points and get out it doe not mean that the other trader held one as long as you
 
Quote from NUTSNEAL:

Stocks = (No to Zero Sum)
Futures = (Yes to Zero Sum)


Simple Equation

FGL=futures gains on longs
FGS=futures gains on shorts
TFG=total futures gains


SGL=stock gains on longs
SGS=stock gains on shorts
TSG=total stock gains


FGL+FGS=TFG=0

Since the above equation is ALWAYS (Yes at all times) equal to zero, futures are A ZERO SUM game.

SGL+SGS=TSG=X

Since this equation is not always (Probably has never even been once) equal to zero stocks are NOT ZERO SUM

X does not equal 0 at all times

To be a ZERO SUM GAME the equation must equal 0 AT ALL TIMES. Whereas in reality, even if the stock market stops trading or even drops to zero the stock equation will not equal 0.
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Please show me where this is NOT correct.

Thanks

NUTSNEAL
 
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