if every stock transaction has a buyer & seller, does that mean 50% of the people will always be losing money?

Question

I just got into the stocks market. AFAIK every transaction must have someone selling and someone buying, both thinking that they will be making money. How can both be making money?

Does that mean at least half of everyone in the stocks market will have to be losers?

In: 97

Answer 1

Yes to an extent they are zero sum. Someone is usually going to be losing out there. There isn’t necessarily a loser in every transaction but there always is losers in aggregate. For example, there were tons of suckers that bought PTON (peloton) at 171.09 per share (ATH) and are significantly underwater and will likely never recover their money. A better example of a zero sum game is options markets, there’s always a winner and loser on every trade.