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Definition

A securities market where the total of capital gains made by investors exactly equals the total of capital losses by other investors, so that subtracting the one from the other always comes back to zero. Derivative markets (futures and options), contracts for difference, currency markets and binary markets are all zero-sum-games. This is as opposed to equities which can be seen as investments because there is a team of managers and directors who are striving to grow the companies' profits over time. As a private investor you should generally stay well away from zero-sum markets because they are basically a form of gambling, not investing. For example, Dischem (DCP) in its financials for the year to 28th February 2021 said that it had added 22 new stores. Its revenue grew in total by 7,6% with comparable store revenue growing by 2,7% - the rest of the growth came from the new stores opened. In a trading update for the 26 weeks to 26th January 2022 revenue grew by 15,3% showing strong and steady growth. So, this company is constantly growing its revenue and its number of stores thus creating increasing profits and value for its shareholders. That is an investment because the capital gains made by investors are a direct result of growth in the business rather than at the expense of other investors. In a zero-sum game (like roulette) gains can only be made at another speculator's expense - with the market (like the roulette table in the casino) taking a small percentage for providing the forum within which the transactions can take place.

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