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

Go to bed. WTF does that have to do with market mechanics?

 

i am now scoring the

"futures are not a zero sum because they are like really cool n' stuff"

and

"stock market is a zero sum because everytime somebody buys a stock somebody else sells it yo"

**trolls**

on my patented Dow Jones (tm) Troll-o-Meter


0--------------------------------------------------------------------------10
weak as hell super sweet

^
II

 

Now that I've spent the last hour or so reading through this, I feel the need to respond.

Perseus, you need to separate the futures market from the underlying. View the corn futures, for example, in a vacuum. For every person who makes $1 on a corn futures contract, someone loses $1 on that corn futures contract (it doesn't have to be that same person who sold that contract- he or she may have made money, but the net result of all transactions in that corn futures market is zero). The fact that they may have made money on the underlying corn is irrelevant. The fact is, the corn futures market, and all other futures markets, are zero-sum. We're not talking about the whole universe of corn markets, we're just talking the corn futures market.

 

exactly--within the confines of one particuar futures market, it is a zero sum game

 

now, outside of the confines of one particular futures market, it can be argued that it is not zero sum and the reason is as follows:

The corn farmer who sells a contract to me and loses money as the market rises, is recouping that money in the cash market, so new money is coming in from outside sources and that keeps the farmer alive. So it could be argued that new money is being infused into the market.

 

lol...so two days later can we all now agree now that the stock market is not...has never been....and never will be a zero-sum game???

cause i think we have beaten this thread to death

but i do apreciate all the people who resonded to my first post!

 

These concepts are so simple and basic that one or two pages would have been sufficient in this thread

 

the issue is not whether or not new money is infused into the market. the issue is that for every penny that is infused long into the futures market, a corresponding penny is necessarily infused short

balance = 0

zero sum game

qed

 

exactly

 

thread is now closed