[kimchi]

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Can you please clear up this mathematical inconsistancy i cant figure out. I used to work in the settlements area for goldman sachs. Institutional Fixed income trading office. All the traders traded with the SAME counterparts and other traders from competing firms for the most part day in day out.

For every trade there is usually one winner and loser. If thats the case in the long run should HALF of all those traders be losers? How can they all be employed for so much $$ if only half likely to make $$$? Or if thats not the case, how can more than Half turn profits?

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I suspect there were other players that donated to the group of traders you were talking about.

Besides, trading isn't zero-sum due to costs - but this means there should be more losers than winners. You also need to consider what the traders' objectives are. I remember reading an article about a trader who cleared $250k per month day trading for a large investment bank. This seems decent until you consider he had practically limitless access to capital and his results represented less than T-bond yield rates as an annual return on this account.

The trader earned huge bonuses since his objectives were to create a huge turnover in trades while trying to limit losses (they expected a loss). He'd get a bonus for basically breaking even. The bank just wanted a large presence in the market to attract accounts from other private and institutional investors which was obviously highly lucrative for them. This particular trading was therefore (expected to be) a loss-leader.