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Strategies & Market Trends : Are you considering quitting your dayjob to daytrade?!
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To: SpongeBrain who wrote (70)1/18/1999 2:08:00 AM
From: SkyDart  Read Replies (1) of 611
 
<<Stocks a zero sum game ??<<

Please allow me to answer.

Theoretically stocks are zero sum because when one buys, another has to sell and vise versa. However due to slippage and commissions, it is actually a negative sum game. The winner or buyer of an appreciating stock gets a little less form the seller and the seller pays a little more than the buyer gets. Kinda like real estate; Also a zero sum game.

<<But if a stock keeps going up... there doesn't...have to be another loser<<

Once the money is injected into the market it becomes a zero sum game in theory. But good point.

The long does not realize his gain until someone buys from him. Imagine that the long bought from short seller and that the short seller covered when the long ultimately sold.

Dart
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