No. of Recommendations: 7
Technically it would be a negative sum game after the rake (fees) by all participants is taken into account. Sure the fees are generally small and not everyone pays them, but they do exist.
Well, sure, but that's true for almost every human activity : )
The options contracts per se are zero sum.
Unlike, say, common stocks.
One possible demonstration:
Imagine that every stock in the world were trading at fair value tomorrow, and we all agreed on that fair value.
The sum total of the market cap is vastly more than the aggregate amount paid for the shares by their current holders.
Another possible demonstration:
Again, let's assume that all stocks always trade at fair value all the time.
I buy a stock from you for $100.
A year later there have been retained earnings of $4 and dividends of $2 sent to me, and the share price is up a bit because the value is up a bit. That "extra" did not come from your pocket.
Jim
