What makes the stock market different than gambling?
（I can make educated guesses and research my horses at the race track, and you can get 20 bucks back from only investing 1 dollar, easily. You’ll be hard pressed to get that return in 1 day at the stock market. And who want’s to gamble in the long term? You invest $10,000 only to have the broker tell you that you MIGHT get a good return? Find me a broker who will tell you NOT to buy stock and I’ll give you a $100.）
Answer ：
While you can get a 20-1 payoff on a horse, the volatility is a lot higher than the market. Reward is related to risk.
A better argument can be made that the options market is like gambling. However, this argument is mitigated by the fact that derivative securities can be used to hedge other positions.
Posted: July 26th, 2010 under US Stock Market.
Tags: the stock market, the stock market different than gambling