Trading in the stock market can be quite similar to online gambling, and the difference isn’t always clear cut. Both involve risking money for potential gain. To get a clear view of the main areas that set the two apart, we need to dive into each field.
Investing in the Stock Market
Most stock exchange investors dislike being compared with gambling, even though the similarities are quite striking. Investing in the stock market or trading applies the same theory as gambling. Trading is dealing with odds; for instance, you could take advantage of rising markets like the Canadian dollar to buy a more robust currency like the Euro.
Nonetheless, the stock market entails holding onto an extensive market index of stocks which yields money over time. Unlike casino games designed to generate a negative expected return, the stock market should have a positive expected value. Companies that issue stocks in the stock market are virtually customers owning shares to the company, and they pay you as an investor to take on the risk. Investing in the stock market is more long-term than online gambling in casinos. It’s a game of patience and consistency in returns. The target is buying the stocks that will perform best over some time. Investors will often study trading patterns by interpreting stock charts to enhance their holdings’ performance. Stock market technicians work to control the charts to scrape together and predict where the stock is heading in future. Technical analysis is the area of study dedicated to analyzing charts. It’s essential to note that the commission an investor has to pay a broker to buy or sell on their behalf plays a considerable role in the amount of investment returns. Something else to note is a conflicting aspect of gambling on the stock market and online casino gambling. When you risk your money by investing in a stock, you are entitled to a share of the principal company, and some companies even compensate you for your ownership. However, when you gamble in an online casino, you’re merely staking your money, expecting something or no returns at all.
A perfect depiction of a trade is the Amazon shares that cost $1,901 per share in April and a rise to $3,531 by September 2. This is an 85% gain to the April buyers. Apple also saw a staggering rise in the stock market from $60 to $134, a growth of 123%, doubling your money in a short time.
Just like gambling at a casino, buying stocks and shares is risky because, in most cases, anything that goes up must come down.
Gambling in Online Casinos
Gambling, also known as betting online, involves staking something on a possibility. This form of gambling solely depends on chance. As stock investors, casino gamblers must carefully consider the bankroll’s size they wish to wager. For instance, in some card games like poker, you’re provided with pot odds to help you calculate your risk capital versus your potential gain, i.e. the amount of money to call a bet compared to what is the pot.
Professional gamblers are similar to stock market technicians in that they like to have more control of their money, which makes them quite proficient in risk management. They will research information about a track record, a horse’s bloodline, a player or history to have an edge. In online casino gambling, you’re playing against “the house,” which is the casino itself. In sports gambling and lotteries, bettors are essentially playing against each other since the number of players determines the odds.
Unfortunately, the odds are heavily against the casino gambler. The probability of losing is always higher than that of winning.
Whether you are investing in stocks or gambling at an online casino, you’re taking a risk on your capital in hopes of potentially high returns. Nonetheless, NZ online casino gamblers have limited ways to mitigate losses compared to stock market investors. This is due to the simple reason that online casinos will always have the edge over the player and the chances of winning are still minimal, unlike in the stock exchange, where players have more control of their investment through more sources of information available. This doesn’t imply that casino players will never hit the jackpot, but it’s highly unlikely. Traders can study the patterns in the stock exchange charts and predict the future. Trading is more about the long run since the odds keep growing over time. Gambling is short-term where you bet your money on a specific game and expect returns at the end of the game. Gamblers can take advantage of the games with minimal house edge to maximize their chances of winning.
In conclusion, there’s a thin line between online casino gambling and stock market trading. Both involve risk for potential gain, and they offer some life-changing returns. No matter how different they appear, they use almost the same principles.