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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction -- Ignore unavailable to you. Want to Upgrade?

To: Solon who wrote (51089)	9/12/2006 5:55:49 PM
From: TimF	Read Replies (2) \| Respond to of 90947

If someone paid you $5mil to play poker than playing poker wouldn't be zero sum for you, but generally it is. Reducing your risk through a hedge does not change the fact that everything you lose or gain over all your transactions will be equalled by the exact same gains or losses of other parties. Reducing your risk through a hedge can itself be a gain. The dollar balance of the trade might balance out with other trades but that doesn't make the whole market zero sum. Just as your winnings or losses in poker might be balanced out by other winnings or loses, but if you get paid to play it isn't zero sum. The trade, or the win/loses in a poker game may be zero sum when considered in the most narrow of senses, but they may also be intrinsically connected to real gains.