Corporate profits, market growth averages 8% or more... Not a big deal guys, futures are fine for those who are experts in the field...just a bit different, that's all. Don
I'm barely restraining myself from making a 'reading comprehension' insult. Come on man, I just told you the exact reason- how'd you miss it?
(opening the can of worms) Wasn't there a million post thread about whether equity markets were zero-sum?
Corporate profits are irrelevant to this debate. Stock prices are defined by transactions. The only thing that can make a stock price go up is a transaction taking place at a higher price. If you ignore broker fees and commissions, all transactions are zero sum. Movements in price between transactions are also zero sum, as there are always an equal number of shares held long (the float) as there are held short (the debt incurred by the company that offered the float in the IPO.) The only thing that can throw off this balance is naked shorting, where short positions are magically invented without a corresponding long position. -Raystonn
Yeah reading coprehension insult would be in order guess i missed that the first time. Its been a long day
zero sum implies that for every gain someone else has to lose. in futures this is true. every position has to have someone on the other side taking a position against you. equities for investors are not zero sum because of the value added nature of business. a farm company buys seed from the seed company and grows wheat and sells it for more than it cost to plant. the miller buys the wheat and makes flour and sells it for more than the wheat cost,the baker buys the flour and makes bread and sells it for more than the flour cost. the store buys the bread and sells it to the consumer and sells it for more than it cost. on and on it goes. each stage is adding value to the product thereby creating profits that the companies valuation and stock price will reflect.
"Right. The simple short answer: Always think about who your opponents are. " I always thought my biggest enemy was myself. And since I'm pretty sure I'm a dumbass, how come I'm down so much this week? Point taken about the talent involved in various mkts, but just cause she's the hottest chick in the bar doesn't mean you can't talk to her. Trading the mini's may not be as easy as trading the oil sector, but there are still enough tradeable events for somebody to put up big numbers. It always has perplexed me as to why there are no mini traders posting regularly on the P/L site (at least I can't recall). I mean someone on this friggin site must be making a good living off the mini's and willing to post it.
Being a lifelong Chicagoan, when I thought about trading when I was younger, the first thing that came to my mind was commodities, like corn, soybeans, pork bellies, etc. Now I know that they're futures, and I know that bond stuff is bigger in Chicago, too, not stocks. Everyone knew a cousin, or an second uncle, or best friend's brother who struck it rich in the pits and moved to the North Shore. Once in a while you'd hear about the guys who lost their shirts, but that was more rare than the success stories. Also, not to discredit stock traders, I always thought of futures and options traders as being more of a "professional", full-time thing -- you had to be if you worked on the floor. I also think it's more difficult to successfully trade derivatives. I don't know how many part-time, retail futures traders are out there (maybe quit a bit, for all I know), and I'm not sure how electronic markets are changing this whole paradigm, but that's just my two cents.