Milgrom and Stokey (1982) addressed an important question about why people trade securities and whether one can profit from speculation. The famous no-trade theorem in this paper showed that if traders have the same prior beliefs and trading motives are purely speculative, then no trading should happen. This is because all traders correctly interpret the information reflected by the equilibrium prices and expect other people to trade rationally; as a result, an uninformed trader anticipates that he would incur a loss if he traded with an informed trader so would be better off not trading.