| A situation where the one participant's gains are only the result of another participant's losses, and where the net change in overall wealth among participants is zero - wealth is just shifted from one to another. |
For example, futures and options trading is zero-sum games because for every holder of a profitable contract, there is another investor or series of investors holding the losses reflected in the other side of that contract. Wealth is only shifted among traders participating in the market, minus broker and exchange fees that facilitate the exchange of contracts.
The FX Market is a classic example of a non-zero-sum game, in which participants use the market to facilitate exchange of currencies for mostly commercial or non-forex-specific investment purposes. Such 'dumb' volume or non-speculative exchange is thought to give traders greater opportunity for speculation.
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