Adam agree, but I think they want to keep going for 100 posts and will then agree to disagree.
--- In OptionClub@yahoogro
>
> At 38 posts and counting, I'm I the first to suggest it's a zero sum thread?
> : )
>
> On Thu, Apr 22, 2010 at 7:08 PM, Joey Huckabee <trading.ocyg@
>
> > You realize posting something like this is going to cause a stir.... :-)
> >
> >
> >
> > Can you elaborate a little? Because I do not understand your point of
> > view.
> >
> >
> >
> > I would think that zero sum by definition means zero.. so splitting hairs
> > options are negative sum
> >
> > and not zero sum like everyone talks about (you mentioned this before).
> > With stocks if you focus
> >
> > on a single transaction buyer and seller then yes we have cash paid - cash
> > received = zero sum (not counting commissions and SEC fees, etc which makes
> > it negative sum); but if you focus on the bigger picture (many transactions)
> > you have an IPO price as a starting point and as long as the stocks price
> > stays above that starting point then it is positive sum (not clouding this
> > with number of shares changes). Then if it goes below the IPO price then it
> > is a negative sum.. but this 'value' is constantly changing and will
> > continue to change as long as the company is public and people want to buy
> > and sell the stock. The point is it really depends on your time frame.
> >
> >
> > On April 23, 2010 at 3:00 AM mcatolico <mcatolico@.
> >
> >
> >
> >
> >
> > I don't wish to prolong or belabor this but I would argue that stocks are
> > also zero sum instruments. A finite beginning or ending has little to do
> > with zero sum, it just adds definitive closure to the process for at least
> > one party.
> >
> >
> >
> > *From:*OptionClub@
> > Behalf Of* Jeannie
> > *Sent:* Wednesday, April 21, 2010 10:11 PM
> > *To:* OptionClub@yahoogro
> > *Subject:* Re: [TheOptionClub.
> >
> >
> >
> >
> >
> > As mentioned before, options ARE an even sum game because there is a finite
> > beginning and a finite end (expiration)
> >
> > As you point out... on the other hand, stocks can't be calculated to be
> > either way, because it is difficult to define the beginning (would have to
> > include private equity pre-IPO and IPO pricing), and furthermore, most have
> > not had an end yet. Secondly, not all stocks are evenly shorted. Thirdly,
> > the market maker on the other side of your stock trade will hedge with not
> > only shorts but also options, so other instruments are also involved. One
> > might try to argue that gaps cause magical creations or wipe-outs of market
> > cap, but there is another side to the trade (market maker or short), and as
> > explained, that side involves too many variables to define.
> >
> > On Wed, Apr 21, 2010 at 8:37 PM, mcatolico <mcatolico@.
> > wrote:
> >
> >
> >
> > In this case you are discussing fictive gains and losses. If the market
> > goes from 11,000 to 6,500 or vice versa and you never do anything to your
> > holdings you've neither gained or lost though you may have a psychological
> > "wealth" or "loss" affect. Since all stocks are synthetic options, there is
> > no question that someone gains and someone loses. (of course if you never
> > sell something that has lost 99% of it's value in the hopes that it will one
> > day recover, you are suffering from another form of psychological delusion.)
> >
> >
> >
> > *From:* OptionClub@yahoogro
> > Behalf Of* Dave
> > *Sent:* Tuesday, April 20, 2010 3:36 PM
> > *To:* OptionClub@yahoogro
> >
> >
> > *Subject:* RE: [TheOptionClub.
> >
> >
> >
> >
> >
> > My two cents worth ……
> >
> >
> >
> > A rising tide raises all ships, and vice versa.
> >
> >
> >
> > When the market dropped to 6500 and stockholders saw their assets drop by
> > billions of dollars, there wasn't someone "on the opposite side" that made
> > the same amount of money – not a zero sum game.
> >
> >
> >
> > When the market recovered back up to 11,000 and stockholders saw their
> > assets rise by billions of dollars, there wasn't someone "on the opposite
> > side" that made the same amount of money – not a zero sum game.
> >
> >
> >
> > When some writes a covered call and the value of the stock soars, the
> > writer makes as much money as he planned, and the buyer of the call makes
> > money. No one "on the opposite side" lost money – not a zero sum game.
> >
> >
> >
> > I know some would say that people who sold something, and the price went
> > up, lost money. That's opportunity cost – not real loss. If you equate
> > opportunity cost to real loss, just imagine how much we're all in the hole
> > financially since we didn't all take second mortgages on our houses and use
> > it to buy Google in 1996 – LOL.
> >
> >
> >
> > Good trading -- Dave
> >
> >
> >
> > *From:* OptionClub@yahoogro
> > Behalf Of* Jack
> > *Sent:* Tuesday, April 20, 2010 6:07 AM
> > *To:* OptionClub@yahoogro
> > *Subject:* RE: [TheOptionClub.
> >
> >
> >
> >
> >
> > I had never thought about a poker game having and `ending' but that is true
> > of all sports betting AND of options. In fact, all derivatives. Granted
> > you can roll your position out to the next month, but that's like starting a
> > hand in another poker game before you finish the one you are in. J
> >
> > While it is true I have no effect over whose call is exercised against, in
> > the example, I was using an underlying with only 1 open contract. J
> > Course, the seller could always buy his was out from the market maker – or
> > another investor. J
> >
> >
> >
> > *From:* OptionClub@yahoogro
> > Behalf Of* Ricky Jimenez
> > *Sent:* Monday, April 19, 2010 8:20 PM
> > *To:* OptionClub@yahoogro
> > *Subject:* Re: [TheOptionClub.
> >
> >
> >
> >
> >
> > The difference between options and poker is that there is a definite
> > beginning and end of a poker game and that beginning and end applies
> > to all players so it is easy to total the profits and loses for the
> > individual players at the end of the game and get zero. There might
> > be a precise analogy for options but I have never seen it written
> > down.
> >
> > By the way Jack, you can exercise a call you own but you certainly
> > can't specify that the person who sold you the call is also the one
> > who sells you the stock.
> >
> > On Mon, 19 Apr 2010 16:28:10 -0500, "Jack" <jack@...<jack%
> > wrote:
> >
> > >It's like a poker game. If you win, someone has to lose (and the house
> > takes a cut).
> > >
> > >
> > >
> > >Look at an individual option. If I buy a call for $1, the seller gets $1
> > (plus/minus our commissions)
> > I am out $1. If it goes up and expires $2 ITM, I'd make $2 ($1 profit)
> > either by closing before expiration OR calling his stock and selling it for
> > a $2 more than the strike price. Now, I make a $1 profit and the seller
> > loses a $1.
> > >
> > >
> > >
> >
> >
> >
> >
> >
> >
> >
> >
> >
> >
>
>
> --
> Adam
>
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