Zero sum trading refers to a situation where one participant’s gain is exactly balanced by another participant’s loss. This concept means that the total amount of wealth in the trading environment remains constant; wealth is just redistributed among participants.In trading cryptocurrencies, if one trader makes a profit by buying low and selling high, another trader loses a corresponding amount by buying at a higher price and selling at a lower price. Therefore, the net change in wealth remains zero.This type of trading typically occurs in derivatives markets, such as futures and options, where contracts are exchanged that derive their value from underlying assets. A trader betting on the rise of a cryptocurrency may win at the expense of another trader who bet on its fall. Understanding zero sum trading is important for participants because it emphasizes the competitive nature of trading strategies. Successful traders often rely on market analysis and timing to maximize their chances of profit while minimizing risk.