Options and futures markets are known as zero-sum markets for traders, in which you have exactly as many winners as losers.
If one person makes a profit, then the other person loses the same amount, resulting in no net gain or loss in the market as a whole, that is why its terms as the zero-sum market.
In other words, it’s a situation in which one person’s gain is equivalent to another person’s loss, and net change is wealth is zero.
Pokers and gambling are other examples of a zero-sum market. In these games, the amounts won by some players equal to the combined losses of others. In games like tennis and chess, you have one loser and one winner, which is why it’s known as a zero-sum game.
The stock market is not a zero-sum game. Over the long-run stock market will have more winners than losers. In the long-term, the number of participants and the amount of money constantly changing.
