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>The point is that every game has winners and losers. If so, then the point is wrong, because Game Theory[0]. With very few exceptions (e.g. futures and option
by stevetrewick 11y ago
>The point is that every game has winners and losers.
If so, then the point is wrong, because Game Theory[0]. With very few exceptions (e.g. futures and options contracts, IIRC) trade - that thing markets do - is a positive sum cooperative game, that is to say win/win.
[0]https://en.m.wikipedia.org/wiki/Zero-sum_game#Non-zero-sum https://en.m.wikipedia.org/wiki/Zero-sum_game#Non-zero-sum
- simonh 11y agoYour general point is quite correct. Both sides can certainly win in a futures contract and often do. A farmer sells his future crop now at a discount so he can buy fertilizer he couldn't otherwise afford, but without which there would be less crop to sell. Meanwhile the future crop buyer gets the crop at a discount. Win-win. Pure financial derivatives trading can generate absolute winners and losers, but they know that getting into the game, and the advantage for commercial participants is that the 'gamblers' increase liquidity in the market.