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I believe trading is a net sum loss game for the traders, consider trader A
sells his long position to trader B to cover his short position, trader B pays
50.00 Trader A receives 45.00, thus the net was a loss between the traders. In
other words 5.00 was taken out of the market by the brokers, dealers, and
exchange.
____________________Reply Separator____________________
Subject: GEN: Zero Sum Game
Author: owner-realtraders@xxxxxxxxxxxxxx
Date: 6/6/98 6:15 AM
Let's talk about the concept of a Zero Sum game. The implication is that for
every Dollar won, there is a Dollar lost. This is the nature of the futures
market. Assuming you are a better trader than the "other guy", you will "win"
that dollar and he or she will "lose" it. But that's a tough assumption to
make, especially when one is just starting to trade futures.
The stock market on the other hand is not a zero sum game. It averages 10%
per year apprectiation, which I guess makes it a "10% Sum game" (long) and a
"-10% Sum game" (short). Trading stocks on the long side is a fertile
training ground for "future" "futures" traders who want to practice with a 10%
backwind (try saying that 10 times fast). Just my opinion and food for
thought.
{DISCLAIMER: I have no professional connection with any stock exchange}
Best Regards,
Jerry Rehert (grehert@xxxxxxx)
Atlanta, GA
@ 06:03 am, June 6th, 1998
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