[GCB]

I wish he would have shared something more specific on how to exploit what he was talking about. He basically said losers move the market (a variation on JC's "the market's move because they have to"), but he didn't say anything on how to know when this is happening. I sensed this frustration in the interviewer as well.

Is the answer in his book?


I'm not sure I buy his point about zero-sum markets either. The cash market is not zero-sum, the futures market is. But the index futures market is based on the cash market. If trade SPY or I trade ES I'm trading essentially the same price movement. So if I'm trading SPY is it not zero-sum and if I trade ES it is zero-sum? If I buy an index mutual fund or a future contract and keep rolling it over I'm basically doing the same thing. Is one zero-sum and the other not? That makes no sense.

Technically an index future contract is "zero-sum." But it's based on something which is not. The whole zero-sum thing is a carnard. Everyone gets something out of the markets. The winners get money and the losers get lessons. It's win-win if you want it to be. The problem is losers don't gain anything from losing, that's why it seems like an ultimate loss.