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

Discussion in 'Trading' started by madmunny, Feb 25, 2006.

  1. Explain how it can be negative sum?
     
    #11     Feb 25, 2006
  2. No...read above...you guys do not see the forest for the tree's...why should I waste my time...

    I am a trader not a theorist...


     
    #12     Feb 25, 2006
  3. The instance you enter the trade you are upside down. The longer you are in it the more you give away in waste...to where the time verses yield screws you...

    A fellow the other day told me, his grandfather portfolio just got back to BE, as he held all through the bubble days up until now...

    BE for all this time...sheeesh
     
    #13     Feb 25, 2006
  4. Your point is valid... this is useless info... the bottomline is can you buy something for a dollar and sell for two. If the answer is yes, you know your stuff and nothing else matters. But the fact remains it is zero sum. If you make money, some either gave you that money or gave up the opportunity to make that money. If you pay a commission, someone else received that commission.
     
    #14     Feb 25, 2006
  5. Alright, perhaps the stock market is not zero-sum because it does not require short sellers. The futures markets obviously are, and that is what people usually are referring to when they say zero sum game. The stock market may be positive sum as long as new funds are coming into the market. The moment funds start leaving the market it becomes negative sum for anyone buying a new position.

    Of course, if you count opportunity cost, it is zero sum. (excluding commissions, fees, loss of sleep, ..whatever)
     
    #15     Feb 25, 2006
  6. You must consider time in your example...this is negative sum...go back to school :) time is your thief...especially overnight!


     
    #16     Feb 25, 2006
  7. how so, most of my trades make me 1% plus the minute I enter, where can I get that elsewhere? how am I upside down?
     
    #17     Feb 25, 2006
  8. They would make you 2% if there was no spread, commission or games! you lose 1% einstein.,..


     
    #18     Feb 25, 2006
  9. if I lose the spread, is someone else making the spread?
     
    #19     Feb 25, 2006
  10. I do not think it is fair to count the bid ask spread. You can sell at the offer and buy at the bid without the market necessarily going through you. i.e. if you sell at the offer, that doesn't necessarily mean that it is now bid at the price you sold it at.
     
    #20     Feb 25, 2006