In the secondary markets, stock option investors make money from the loss of other stock option investors. In fact, the losses of one investor become the return to the other. Would you consider this type of option investment as
A) A zero-sum game
B) A positive-sum game
C) A negative-sum game
D) None of the above

Question

Quizplus · Accepted Answer

In a zero-sum game, the gain of one participant is exactly balanced by the losses of another participant. Since stock option trading in secondary markets involves situations where one investor's loss becomes another investor's gain, it fits the definition of a zero-sum game.

In the Secondary Markets, Stock Option Investors Make Money from the Loss