How Buying And Selling Stocks Resembles Gambling

Oliver Keegan

Casino expert

Updated:
How Buying and Selling Stocks is More like Gambling

If you’ve considered investing in the stock market, the idea that it’s consistent with gambling may be on your mind. So, is the stock market gambling?

Gambling vs Trading

Gambling vs Trading

Gambling and investing are both activities that entail an amount of risk for a future return on that risk. In this regard, one can equate the two concepts and conclude that investing is gambling in at least one sense of the word. 

Yes, the risk they involve is a common factor in gambling and trading, but there are all sorts of activities that involve risks unrelated to gambling, stock trading, or one another.

Though similar in more regards than just the level of risk involved, there are also fine differences that separate gambling and investing. 

For the most part, gambling relies heavily on the probability and chance of a certain imminent outcome when playing a particular game.

Moreover, gambling is simply a form of entertainment for most people, while those who trade and invest expect to gain money.

On the other hand, trading usually requires much more forethought, planning, and analysis, despite some calling it stock gambling. 

Of course, some invest in a manner that resembles stock gambling by foregoing conventional trading patterns. 

Both stock gambling and casino gambling can lead to compulsive behaviour, but gamblers tend to be more prone to addiction.

Similarities Between Gambling and Trading

Similarities Between Gambling and Trading

  • Gambling and trading can both be treated as a profession
  • Risk is the common denominator
  • Investing money for an expected gain
  • Unexpected results are a common element of trading and gambling
  • Experience, skill, and luck can affect the outcome

Differences Between Gambling and Trading

  • Gambling has a more uncertain outcome
  • The level of risk involving gambling is considerably greater
  • Trading/stock gambling is more socially acceptable
  • It’s easier to mitigate losses for an investor than for a gambler
  • Casino gambling can be much more addictive than stock gambling
  • Gambling is an actual form of entertainment

How to Invest in The Stock Market

How to Invest in The Stock Market

  1. Use a ‘Find a Broker’ service 
  2. Decide on the type of investment
  3. Research and find a preferred exchange platform
  4. Open an account 
  5. Carefully determine your investment amount

Use a ‘Find a Broker’ Service 

If you’re interested in investing in the London Stock Exchange but have no experience, it is preferable to use it.

Find a Broker service to solicit the help of a professional stockbroker who will guide you through the steps.

Decide on the Type of Investment

Before you start investing, decide how you want to invest, i.e., whether you want to manage the investment yourself or hire a broker or other investment professional.

Research and Find A Preferred Exchange Platform 

Similarly, as you’d look for an online casino by means of comparison, you can start comparing exchange platforms and find one that is safe and suited for your investment.

Open an Account

You need to open an investment account personally or with the help of a financial advisor and buy stock or make other investments.

Carefully Determine Your Investment Amount 

There is no universally accepted minimum threshold for investing in the stock market. It can be as low as £100 or up to £1,000. 

Online brokerages do not limit the minimum amount on investments, while some brokerages even allow you to buy fractions of shares for amounts that can go as low as £5.

Activities with High Risks

Activities with High Risks

Gambling involves high risk in the short term compared to trading and investing in markets like the S&P 500, NASDAQ, or the London Stock Exchange if you are in the UK. 

But investing in the stock market without careful planning is a form of stock gambling that can be just as, if not more detrimental than, casino gambling, depending on the size of the investment.

The London Stock Exchange, for instance, has more than 1,300 companies listed on the main market and more than 1,000 on the junior market, so it is easy to go astray and make a wrong investment without proper guidance and information.

How Does Taking Risks Influence Your Brain

Risk is an obvious commonality of casino gambling and stock gambling, but are the two really comparable? 

At their base, both activities have their roots in deep neural and cognitive processes linked to the sensation caused by risk-taking and our system’s response to a certain level of stress.

Taking risks, whether when you gamble, trade, engage in extreme sports, or drive fast, is rooted in deep, still-unexplained fluctuations in the brain. 

When you take a financial risk, the excitement of winning, rather than the risk of losing, mostly affects the brain. 

Neurotransmitters activate a chemical named dopamine that creates a pleasurable sensation and a feeling of excitement, according to research conducted by an Illinois organisation focusing on addiction medicine.

So, whether you engage in casino gambling, stock gambling, or another activity involving risk, the release of pleasure due to dopamine plays a key role. 

For that reason, just like gambling addiction, even traders and investors are prone to developing a stock market gambling problem.

Stocks Are Volatile

Stock market volatility is something every prospective investor should take into consideration before investing. 

The market and individual stocks can fluctuate and be volatile due to socioeconomic, political, and natural factors.

Stock market volatility usually occurs in periods of widespread uncertainty and fear when the imminence of something prompts people to buy and sell stock en masse, which consequently affects entire markets.

Volatility, or variance, is also a term that has a narrower meaning in the gambling industry to refer to the risk of losing a bet. 

Many games, particularly UK slot site titles, are classified as having low, medium, or high volatility to inform players about the game’s volatility.

Inflation Affects Every Market

Inflation Affects Every Market

The UK recorded an inflation rate of just over 10% for November 2022, impacting nearly every sector of the economy and dramatically affecting the prices of consumer goods.

Inflation affects the various markets on the London Stock Exchange, including the gambling industry. 

With high inflation, consumers who like to gamble are forced to either reduce the amount of money they spend on gambling or stop gambling altogether.

Casino Stocks

On the topic of investing and gambling, there is, of course, an option for those interested in investing in the casino industry by buying casino stocks. 

The UK has a highly regulated gambling industry with many top online casinos, including Grosvenor, 888 Casino, QuinnBet Casino, Betfair Casino, and so on.

If you’re a beginner, you can do basic research on Bally’s casino stock price, 888 casino stock, or the stock price of another gambling company. 

Still, you may need the help of a professional financial advisor to guide you through the formalities.

Adopt a Strategy

Adopt a Strategy

Whether you invest in the London Stock Exchange, individual stocks, mutual funds or exchange-traded funds, or something else, having a strategy is essential.

Stock trading and investing require considerable planning, but serious real money blackjack, poker, or roulette gamblers frequently adopt certain playing and betting strategies to improve their chances of a more favourable outcome.

Reasons Why You Need a Strategy

  • To reduce the amount of risk
  • To achieve better results
  • To manage the amount of money you spend
  • To calculate your potential losses
  • To have a complete overview of the budget

Does Your Bankroll Influence Your Chances?

The size of your bankroll will always affect your chances of success to a smaller or lesser degree. 

Whether you gamble in a casino or engage in stock gambling, you should always be prepared to suffer a loss. 

However, having the backup capital to pull through those times might prove vital for success in the long run.

Stock Market Gambling Addiction

Stock Market Gambling Addiction

As the medical examinations cited above show, taking risks and the prospect of winning, rather than losing, as a result of risk releases dopamine, which is associated with a feeling of pleasure. 

This can consequently lead to compulsive behaviour and stock gambling, in fewer cases, to stock market gambling addiction.

It is vital to show self-awareness about your practices and estimate how much loss you can suffer without experiencing a tremendous economic impact. 

The moment you start spending more money on casino games, blindly invest in pink sheets to cover for a loss or spend more money than your budget allows you, you should seek help from a professional organisation.

Gambling vs Stock investment – Final Thoughts

Casino and stock gambling are two different yet inherently interlinked concepts, at the core of which lies the desire for financial gain due to financial investment.

But as much as this equates to the two practices, investing and stock gambling entails more strategy and organisation and generally have a positive expected return compared to casino gambling.

Also, when speaking of addiction, it is associated more with casino gambling rather than with stock gambling which, while on a much smaller scale, can still lead to behaviour that meets the definition of addiction or compulsion.

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