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Zero-sum game (with spoiler)

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Gooische Vrijgezel
862280.  Sat Nov 05, 2011 4:17 pm Reply with quote

With spoiler, sorry, allowing me to skip chatting boys with toys:

Why is this popular definition wrong, a classic case of General Ignorance? Or this source?

But why, on the other hand, is somebody claiming that options trading isn't a zero-sum game also wrong?

Example, excluding costs as usual:

Quote of share XYZ: 10.20
Ms. A pays 0.13 (open buy) for a call option (open buy), i.e. the right to obtain 1 share XYZ for 12.00.
Mr. B sells (open sell) the call option, receiving the 0.13

Quote of share XYZ: 12.50
Ms. A sells (close sell) the call option, receiving 0.90
Mr. B buys (close buy) the call option, paying the 0.90

Ms. A gained 0.90-0.13=0.77
Mr. B lost 0.13-0.90=-0.77
0.77-0.77 equals 0, indeed it's a zero-sum game


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Posital
862292.  Sat Nov 05, 2011 5:52 pm Reply with quote

I think the answer approaches 5.7 over a period of 20 years...

 

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