That has already been pointed out about 10 pages ago before certain people took it upon themselves to make this thread a lifelong quest.
The notion is silly, so I will take a look later, just because I am curious, what the good, old prof says. I have a trouble with authority and BS. For the record, poker is zero sum if you play with your friends, and negative sum if you play in a casino or online because of the rake (comission). Try this: Go to a casino with $100 and 9 of your friends, everybody having only $100. Get a table and start to play. Let's say the rake is $1 from the winnings at each hand. You guys should be done playing in 1000 hands, most likely sooner, one guy having a few hundreds, and everybody else lost everything....
pekelo, what you and others are having problems with is defining benefit beyond money, not authority. In the narrow definition offered here, anytime you lose money, you lose whatever game you are playing. haven't you ever paid money for something and said- 'that was worth it'? people here all the time claim that beginners will lose money but it is worth the education if you learn from it. To say that everyone who loses money are losers, even those who expect to lose, is a narrow way of looking at it. Another example, take the farmer with corn and instead of hedging with straight futures he buys a put. To some here to idea of the gained utility of offloading risk is irrelevent, if the option expires worthless the guy is a loser (even if corn shoots through the roof!) no matter what the player himself says about it. Take that even further, when I buy car insurance I lose money. By some definitions here I am a loser even though I offloaded risk and gained a whole lot of peace of mind. Ignoring external benefits (external to money) of any game is pretty dumb especially when a large number of players are playing for externals.
Once more, external benefit has nothing to do with the fact that derivatives markets are zero sum. NOTHING. No one ever disputed that you cannot gain externally. That was never the question. That still does not change one bit, the fact that derivatives markets are zero sum excluding costs. Including costs the story gets much worse. You are arguing the color of the sky when everyone else is talking about the texture of grass. Let it go for goodness' sake. I mean come on, in your article you offer to support your argument, the second line in the .pdf states and I quote: "No trader can profit without another trader losing." Selective reading/perception perhaps?
well saturnine if you read it all you would have gathered the understanding intended, but since you have reached a foregone gone conclusion then it doesn't matter really and you focussed in on one sentence. Yes I saw that sentence, but I also read and understood the rest. external benefits (other than money) are extremely relevent in the definition of zero sum game , you are stuck with your brain shut, so drop it and move on
buy1sell1, I happen to enjoy academic discussion once in a while. Of course this will not help anyone make money, but that goes for about 99% of the threads in ET. Alternatively, Why would someone who doesn't care even bother to open the thread and post?
Let's trod down a familiar path, using a slightly different twist: -- Corn farmer "shorts" his corn for $50,000; speculator "long" for $50,000. -- Pig farmer buys contract from speculator for $55,000; speculator has $5000 gain. -- Corn Farmer delivers corn and receives $50,000 from pig farmer, who feeds corn to his pigs. Was this a zero-sum or non-zero sum game? If we conclude "zero-sum", then we must be able to show that someone suffered a loss. We have tried to argue the corn farmer lost $10k in the example scenario. I am having trouble understanding that, however, because his financial position did not change as a result of rising corn prices. The corn farmer certainly surrendered $10k in potential profit. Is that how we are concluding this example illustrates a zero-sum game?
You have failed to define the scope of your game. If the scope includes 3 individuals then there is insufficient information to answer the zero-sum question but I my guess would be no, it was not zero-sum. If you are asking only about the futures contracts described above then it was clearly zero sum. The world is not zero-sum, the futures market is.