When they say money is lost in a market, like the Stock market going down or the FTX collapse, is money really "lost" or is it just transferred?

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Ultimatelly, if your leveraged position gets liquidated everyone gets paid except you. Spot positions are different, where the ultimate owner of the underlaying asset will write-off a potential loss/gain in their books. Derivatives its more brutal but in principle the same. Bottom line. It's a sum zero game. Assets + expenses = Liabilities + interest

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It is transfered. Money could be transfered in multiple ways. I.e., if you have a short, the exchange needs to have a counterposition to offset yours (liability) and be neutral to price changes, call it insurance. The insurance company could have either the underlaying asset or have again another liability to covrr their agreement with the exchange. Ie., with a hedgefund or pension fund whom ultimatelly own the underlaying asset. Every layer in this example gets paid something i.e.,, asset owner gets paid the interests for lending the underlaying asset (rights to use it as collateral), the exchange (as marketplace) will get paid a comission charged to the demand (users) and will pay the market maker (liquidity provider) to safisty exchange aggregated demand (all their customers).

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FTX collapse is different. What I describe above are some examples of how a regulated market operates. FTX incurred apparently in illegal transactions i.e., by using the exchange customer funds to take poaitiona in their behalf with their consent.

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Hidden frauds trigger legal actions. SPACs were honest legal frauds.

Right, so it's actually a bit misleading when news sources all say: "millions of people have lost money in the stock market", because the counterparty to those losses actually made money

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Or it just evaporates. Like it was never there to begin with.

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