Suppose I buy a share in Microsoft from you at $400. Microsoft do well, and it increases in value to $500. At that point, I don’t want to push my luck any further, and sell my share for $500. It just so happens that you are the buyer.
In this scenario I have made $100 by “playing the markets”. But you have lost $100: you received $400 and paid $500, and ended up holding the same share that you started with. In effect, I have taken $100 from you. (Thanks!)
That was a zero-sum transaction, because your loss exactly cancelled out my win.
My question: is the whole stock-market zero-sum?