Short Term Trading Member Forum

[Toppcats]

Mr. Cash - stock equities trades are not a zero sum game. Stock equity trading can be a zero-sum gane ONLY if the underlying equity has, or falls, to a value of $0.00

Derivative entities - such as ES - have an underlying value of $0.00. Therefore buyers are matched to sellers which in turn are matched to an underlying entity with $0.00 value. Each buyer/seller combination opens or closes a position with the buyers and sellers earning or losing equal values of $$

Stock equities have an inherent underlying value as they represent a share of the underlying company. This underlying value is constantly changing. The result is that each successive buyer - seller combination becomes subject to a unique/differing valuation of the equity invloved. In addition, in theory unlike the derivative, the position in an equity is never closed but shifted from one owner to another. The result is that owners of the same equity share in sequence can make or lose differing total sums of money. Market factors/market makers can also shift or manipulate prices with arbitrage gaps thereby making unequal amounts of total $$ value won and lost by buyers and sellers. Result is that stocks are not a zero-sum game.

Gary