It does not, and it’s what has been explained many times already here.
The simplest way of looking at it is as follows:
- A company has millions of shares outstanding. Let’s say the company is valued in total at about $10B.
- At the same time, there are hundreds of different options trading on that company’s stock. Let’s say a total of $10M was invested into options on that company’s stock.
- One evening, the company reports blowout earnings and the stock goes up by 20% in one shot.
- The next morning, ALL the shares are valued at about 20% higher. And they begin trading at that higher price. The value of that company is now about $12B in total.
- What happens to the options that morning? Sure, the value of each option changes (calls go up, puts go down) because the value of the stock has changed. HOWEVER, the sum total of money in those options remains at exactly the same $10M as the night before. The only difference is that the people that were long call options or short put options have more of that $10M, while the people who were short call options or long put options have less of that $10M.
And this is precisely why stocks are not zero sum (because the total value can go up making everyone a gainer) while options are zero sum (because the total value cannot go up making some losers and some gainers - always).