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It is zero sum over the lifetime of a company. Theoretically, every company have a lifetime (be it 10 years, 100 years or 1 million years). You only considered a fraction of that time in your analysis.
exactly, but stock markets are not a zero sum game because some of them pay utilities. Also, when buying shares you become also owner of part of the company.
Your logic is flawed. Common stocks are not tied directly to the performance of the company at all. All you have is voting rights, which are worth nothing.
Yes stock market is definitely zero sum gain only company make profit I explain how If one of ipo coming form compeny of 100 shares 10rs ech All share buying money goes to compney owner who issue share 1000rs Now 10 buyers have all share but more buyers come so price go up now sell price go down in last total is 0
I think it is a zero-sum game if you adjust to inflation. I personally don't care how many units of dollars I make during a trade. I do care about how much stuff I can purchase with them. If I buy a non-dividen paying stock and sell the shares in the future for a 5% gain but then realize that the product I wanted went up in price 7%, I lost 2% purchasing power. In practice, that's what really matter, not the amount of dollars you made in the transaction. If you measure wealth in dollars there is no way to know for sure who win and who lose or brake even until the very moment both parties buy something.
Stocks market is a zero sum game when one stock of a company is increasing the stocks of other companies decreases simultaneously. Or maybe if stocks of companies from one sector increases other sectors take a hit. Or when everyone is getting richer take it as a sign of increasing inflation.
You're assuming that the price will either keep rising or falling. What happens if the price rises but then after some time it falls back to its original price level? That's zero sum alright.
i disagree with your explanation because most of the trading activity in the stock market is speculative, participants betting with each other with buy orders and sell order on the future price changes, which has little to do with real world matters of that company share, hence that's why trading in any market is a zero sum game overall because its not a win win scenario on each trade unlike in a real economic activity where a shop or business sells a product to a customer. In the stock market its different scenario because not every participating trader is going to be holding a share because of fundamentals of the company, most will be betting on future price change with a bet placed as a long or short position, only one position gains money the other loses money, its that simple.
Not logic at all. Basically, trading is a zero sum game. For specific time A will win the game while B is lose. A and B cannot win at the same time. That meaning of zero sum game.
Nah you misunderstood, when the stock market is bullish, people are willing to pay more for the same stock, that's why price goes up, vice-versa, it's basic demand and supply concept.
That was interesting! Always wondered why they call they call it a zero sum game when it actually is not a real zero sum game. There can be situations where the the zero sum game doesn't really apply.
This video is incorrect. A stock cannot go up forever. So the person who buys at the peak loses the money. If a company doesn't given dividends then the only way you can make money is at the expense of others. If not where do you think the money is coming from?
Flawed analysis.. he never did an analysis of the underlying asset that’s the dollars being pumped or dumped into the market? The buyers and sellers entering the market come in with an amount of capital that’s totally capped on what they initially have.. and that’s what they trade with.. and eventually someone will be the winner and someone the loser. One cannot perform the zero sum analysis with 2 variables - the money and the stock..
Why though? Explain. Think really hard about it. Ask yourself the question, will the stock market adjusted for inflation continue to go up in value forever.
When volume of 10,00,000 stocks can be decided by sale of 1stock price than its purely manipulated, without any financial basis one can decide the price of stock. Thank god for introducing upper and lower circuits
It's definitely a zero sum game. Where on earth did the idea of share price going up if the company earns profit come from? The answer: dividends. If google isn't paying dividends and never intends to pay dividends the stock itself has no value. It's only as valuable as the next person that buys if from you. What happens when fewer people enter a market than are exiting it due the retirement of baby boomers? The market looks like a ponzi scheme that depends on younger generations to give it value. With declining population growth this is becoming concerning...
This is wrong. If I own share A and sell it to you at $50 and it goes up to $100.. then I’ve “lost” the upside that you’ve gained. There are always two sides of a trade so it MUST be zero-sum.. granted, its less obvious than a casino or a bet.
It is technically a - sum game for anyone playing intraday trading and the SEC take a cut off of the trades. But apart from that it would be a zero sum game
Stock market is not a zero sum game, but derivatives market - more precisely the option market is a big time zero sum game. And when you compare the size of a traditional 'shares of companies' trading to the options market, the Options market is many folds of the actual shares market and many times of even the economy itself. So, you are not really addressing the question here. #justsaying
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It is zero sum over the lifetime of a company. Theoretically, every company have a lifetime (be it 10 years, 100 years or 1 million years). You only considered a fraction of that time in your analysis.
100% true
But this thing can understand only who have above average iq
exactly, but stock markets are not a zero sum game because some of them pay utilities. Also, when buying shares you become also owner of part of the company.
this!
Yes
Your logic is flawed. Common stocks are not tied directly to the performance of the company at all. All you have is voting rights, which are worth nothing.
True story
Yes stock market is definitely zero sum gain only company make profit
I explain how
If one of ipo coming form compeny of 100 shares 10rs ech
All share buying money goes to compney owner who issue share 1000rs
Now 10 buyers have all share but more buyers come so price go up now sell price go down in last total is 0
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I think it is a zero-sum game if you adjust to inflation. I personally don't care how many units of dollars I make during a trade. I do care about how much stuff I can purchase with them. If I buy a non-dividen paying stock and sell the shares in the future for a 5% gain but then realize that the product I wanted went up in price 7%, I lost 2% purchasing power. In practice, that's what really matter, not the amount of dollars you made in the transaction. If you measure wealth in dollars there is no way to know for sure who win and who lose or brake even until the very moment both parties buy something.
Then think what heppn if u store that money at home
So it's better to take atleast 5%
Stocks market is a zero sum game when one stock of a company is increasing the stocks of other companies decreases simultaneously. Or maybe if stocks of companies from one sector increases other sectors take a hit. Or when everyone is getting richer take it as a sign of increasing inflation.
But the market cap of the stock market perpetually grows, and so does the GDP...
GDP and inflation are generally similar in value, in fact causally linked.
You're assuming that the price will either keep rising or falling. What happens if the price rises but then after some time it falls back to its original price level? That's zero sum alright.
i disagree with your explanation because most of the trading activity in the stock market is speculative, participants betting with each other with buy orders and sell order on the future price changes, which has little to do with real world matters of that company share, hence that's why trading in any market is a zero sum game overall because its not a win win scenario on each trade unlike in a real economic activity where a shop or business sells a product to a customer. In the stock market its different scenario because not every participating trader is going to be holding a share because of fundamentals of the company, most will be betting on future price change with a bet placed as a long or short position, only one position gains money the other loses money, its that simple.
Not logic at all. Basically, trading is a zero sum game. For specific time A will win the game while B is lose. A and B cannot win at the same time. That meaning of zero sum game.
You know who is a winner? Your broker
short-term investments and day trading are zero-sum games. Long-term investments in potential companies are not
Short term is depend on Supply and demand..
if the stock goes up and every body wins, where is the money comes from? well it comes from the loses of short sellers
The loser is the last buyer. For him to win, he has to find another loser to buy his stock.
Nah you misunderstood, when the stock market is bullish, people are willing to pay more for the same stock, that's why price goes up, vice-versa, it's basic demand and supply concept.
Not true, this is not options. I can sell stocks that I previously owned, and do not have to short them.
That was interesting! Always wondered why they call they call it a zero sum game when it actually is not a real zero sum game. There can be situations where the the zero sum game doesn't really apply.
This video is incorrect. A stock cannot go up forever. So the person who buys at the peak loses the money. If a company doesn't given dividends then the only way you can make money is at the expense of others. If not where do you think the money is coming from?
V Good job bro....as always
Dear Sir,can you make a video about Intrinsic value
Flawed analysis.. he never did an analysis of the underlying asset that’s the dollars being pumped or dumped into the market? The buyers and sellers entering the market come in with an amount of capital that’s totally capped on what they initially have.. and that’s what they trade with.. and eventually someone will be the winner and someone the loser. One cannot perform the zero sum analysis with 2 variables - the money and the stock..
In short, zero sum games are tied to reality. If you see the stock market as a non-zero sum game, then you're missing the whole picture, reality.
how to identify ? once few are benefiting and most are losing...thats the benchmark to read the zero sum game theory
Finally I got answer 🙏
This is incorrect. You assume that there is a 1:1 positive correlation between profits and share price which is not true.
It is not short term, but long term it will always be
In the long run, share move accordance to company performance.. In short term, it is depend on supply and demand
Why though? Explain. Think really hard about it. Ask yourself the question, will the stock market adjusted for inflation continue to go up in value forever.
When volume of 10,00,000 stocks can be decided by sale of 1stock price than its purely manipulated, without any financial basis one can decide the price of stock. Thank god for introducing upper and lower circuits
Bro...tell us you also do intraday trading?????
Yes, we do. We trade actively in Bank Nifty and stock futures - intraday & positional. Please checkout vrdnation.com for more details. Thanks!
so how come someone gains when they are shorting
*What about day trading forex ?*
Good question :) Since forex is a derivative (futures), trading in it is a zero sum game.
But in forex, only 5.5 %(appx.) of all the trades is done by retail traders
It's definitely a zero sum game. Where on earth did the idea of share price going up if the company earns profit come from? The answer: dividends. If google isn't paying dividends and never intends to pay dividends the stock itself has no value. It's only as valuable as the next person that buys if from you. What happens when fewer people enter a market than are exiting it due the retirement of baby boomers? The market looks like a ponzi scheme that depends on younger generations to give it value. With declining population growth this is becoming concerning...
It's minus sum game
Think s bro🎉🎉🎉
The last buyer is not a winner, but is the loser
You did well my friend......love your accent
Thank you
Thank you
Best video
Best explained
Removed all my doubts.
Flawed premises. Beta is positive sum, alpha is zero-sum.
This is wrong. If I own share A and sell it to you at $50 and it goes up to $100.. then I’ve “lost” the upside that you’ve gained. There are always two sides of a trade so it MUST be zero-sum.. granted, its less obvious than a casino or a bet.
Is intra day trading zero sum game?
It is technically a - sum game for anyone playing intraday trading and the SEC take a cut off of the trades. But apart from that it would be a zero sum game
very nice video
Thanks for this video...before this I used to believe that share market is a zero sum game!
Stock market is not a zero sum game, but derivatives market - more precisely the option market is a big time zero sum game. And when you compare the size of a traditional 'shares of companies' trading to the options market, the Options market is many folds of the actual shares market and many times of even the economy itself. So, you are not really addressing the question here. #justsaying
Yes, you are right
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Hey guys, We are planning a 2-day Option Masterclass in Hyderabad (11TH to 12TH DEC, 2021) & Bangalore (18TH to 19TH DEC, 2021)Timings: 9am-6pm;
Fees for the 2 days session is 25k. Ideal for someone who wants to get a deep dive into the world of options (no prior background necessary; beginners are welcome). Its going to be really awesome with a lot of real-life strategies and examples.
Our goal is to give you the tools and techniques you need to trade options in real-life (not from a bookish perspective). To enroll please visit
www.vrdnation.com/workshops1
If you're interested, fill out this form and my team will reach out to you with the details (first-come, first-serve basis).
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We want to keep it limited so that we can have a better interaction and learning experience.
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