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Zero Sum Game

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Definition of 'Zero Sum Game'

Futures trading is often referred to as a Zero Sum Game. This is because in any given time period there is always a buyer and a seller for each contract that is traded and the net amount lost by the losers will always equal the net amount gained by the winners.

The Zero Sum Game is only theoretical because operating costs will eat into the profits of the winners and add to the losses of the losers. Typical operating costs include commissions, charting software, computer hardware, trading platforms, trading indicators, subscriptions and services.

Compare this to Negative Sum Game.

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