"But this is the point. The time element is what make the market zero sum. Remove this contrivance and the market is not zero sum." no no no no no no no the other poster had it right. it is this simple - futures contracts are a derivative. there HAS to be a short position for every long position. time is irrelevant. what i suggest people do is look at the COT reports (commitment of traders). what do you notice. if you add up ALL the outstanding long positions (commercials, traders, locals, etc.) and all the outstanding short position, what is the NET? zero. they are exactly the same, and they HAVE to be. it is a structural issue. that is why futures (and options) are zero sum. stocks are not. the stock market as a whole can build wealth. even w/o any new issues (IPO's), overnight assume a market of two stocks doubled in value. the futures market, as a system cannot build wealth because for every tick it moves up or down, an equivalent among of money is won and lost by people on the opposite side futures contracts can be created out of thin air (open interest). futures are agreements - legally binding contracts. stocks are pieces of company. they cannot be created out of thin air based on the activity of traders (please don't get me started on naked shorting... ) futures are great for commercials, hedgers, etc. because they are (most of them) very liquid, and easier to purchase than a basket of underlyings (and less commission costs) or in the case of commodities - 5000 barrels of oil, or a silo full of grain, etc. as for arb'ing. yes, it is totally true that the arb'ers necessarily keep the futures within fair value (most of the time) by taking advantage of "riskless arbitrage" when futures extend above or below a fair value band (and that's something i watch in realtime as a futures trader). it is true that a big trader CAN move the futures market. absolutely. iirc, one such person did that in 87 by dumping 10's of thousands of full size S&P contracts.