BLK blackham resources limited

Not a zero sum game.

  1. 798 Posts.
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    I won't derail another thread to make this technical point, but shares are not a 'zero sum game', as people often claim. Commodities trading is a 'zero sum game' because for a trade to happen every long position taken has to be matched to a short position. So in every subsequent movement of the commodity, either up or down, a gain on the long side has to match a loss on the short side, or vice versa. Commodities trading is always a Zero Sum Game.
    In the case of a share that is generally in an uptrend, such as BLK at the moment, each person makes a gain. Person 1 buys at 4 cents, say, and onsells at 8 cents. P1 takes their profit out of the trade. Person2, the new buyer at 8 cents , is a pip trader and sells at  8.2. Takes out his/her profit. P3 buys at  8.2 and is still holding, with an unrealised profit, and etc. Because there is no need to match each trade to a short position, shares in uptrend are definitely not a Zero Sum Game.
 
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