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

"anyway, traders and econ professors have been debating this for well over a century. "

um, no.

no trader who understands markets "debates" this. it is non-debatable. it is a structure of the market certainty. i am a trader. i am also an investor. that's irrelevant. futures are zero sum. they have to be. it's a structural design aspect.

similarly, stocks are not zero sum. they can't be. it's the design of the market.

"zero sum for which players?"

the fact that you can even ask this question shows you don't understand what zero sum MEANS.

5 people sit down at a poker table with 500 chips each. after 4 hours, one guy walks away with 2500 chips. the other 4 are broke.

that is necessarily true. it's a closed system. for every chip that guy who won got it necessarily meant another trader lost a chip.

a closed system such as that is a zero sum game

futures market is similar in that each additional chip that comes into the game is offset by a short chip

this is NOT true in equities

games/markets are not zero sum for "which players"?

lol, the mere idea shows a complete ignorance of the concept of zero sum

zero sum means that for the aggregate of transactions in the market, the net sum (absent commissions) is ZERO

hence, the name

there is no other possibility in the futures market

that makes it zero sum

the aggregate of transactions in the stock market (absent commissions) are not ZERO

the which players comment is nonsensical

i pull money consistently out of the futures market. that is my job. it is what i do. however, that MARKET is zero sum. saying "it's not zero sum for me" would be nonsensical. because zero sum is a measure of the totality of exchanges within the closet set, not an individuals result within

jeeez
 
What if I find some arbitrage trade of futures against something really odd like tractors? and suppose that in the net I lose in the futures but gain in the tractors? according to the narrow definition here I am a loser in the futures market.
 
Quote from Perseus:

what you are trying to assert is contrary to economics.
Perseus, do you agree that cash settled futures (ES for example) are zero-sum. I want to see if we can at least agree on that.
 
whitster, if the markets existed in a vacuum and the only game was trading then i agree with you. You make sense but I take the broader view.
 
Quote from Perseus:

whitster, if the markets existed in a vacuum and the only game was trading then i agree with you. You make sense but I take the broader view.
You can take whatever view you want but once you include elements that are not part of the futures market then you are no longer just talking about the futures market and hence your conclusions become false.
 
Quote from whitster:

5 people sit down at a poker table with 500 chips each. after 4 hours, one guy walks away with 2500 chips. the other 4 are broke.

that is necessarily true. it's a closed system. for every chip that guy who won got it necessarily meant another trader lost a chip.

a closed system such as that is a zero sum game
whitster, that is the perfect analogy. I'm sure someone is going to say something like, "What if one of the poker players finds an extra $20 in his pocket he had forgotten about?" or "what if someone wins the lottery while they are sitting at the poker table?" .... shesssh
 
The poker game is self contained so i agree that poker is truly zero sum, markets are tied to some economic fundamental, so i don't agree that they are 'closed'.

in the strict sense of the mechanics of trading, if it were closed like poker, then i agree. In the broader sense though since there are correlations to the bigger world then it is possible to lose money in the futures market but have it offset elsewhere.
 
Quote from Perseus:

The poker game is self contained so i agree that poker is truly zero sum, markets are tied to some economic fundamental, so i don't agree that they are 'closed'.

in the strict sense of the mechanics of trading, if it were closed like poker, then i agree. In the broader sense though since there are correlations to the bigger world then it is possible to lose money in the futures market but have it offset elsewhere.
No one is saying that someone couldnt have their gains or losses in futures offset somewhere else but those gains and losses are not part of the futures market.
 
to consider the futures market disconnected from the underlying economy makes no sense to me at all.

there is nothing gained in a poker treansaction, there is wealth created in a true trade of goods.
 
Quote from Perseus:

to consider the futures market disconnected from the underlying economy makes no sense to me at all.
No one has said they consider the futures market is disconnected from the economy, they are saying for the purposes of discussing whether the futures market is zero-sum, you cannot consider things outside of the futures market.

You apparently want to discuss whether the total economy is zero-sum, guess what, I agree, it isnt.
 
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