[Piphacker]

Originally Posted by rhodytrader

Don't use the terms sell and buy, since you're not actually doing either. Link long and short. For every short there must be a long. As such there will always be someone losing when you are gaining, and vice versa.



Of course it is, but both trader's profits will come from someone on the other side of their respective positions. For example, the short-term short may make money, but that will come from the long-term long. When the short covers, he essentially just inserts someone new in his place opposite the long-term long.



The fact that nothing is exchange is exactly why it isn't possible for everyone to profit. It's only in actual asset markets like stocks where things are really transferred between buyers and sellers where you don't necessarily have opposing positions.

As for the banks, absolutely.

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