Is the Stock Market Trading another form of Gambling?

What's the difference? Written by - Mr Roshan Kumar Sahu Edited by - Miss Sayonee Das

Introduction

Is the stock market similar to gambling? This is a frequently asked question now and then. Whenever we think of the stock market, we imagine a picture of a man with a black blazer sitting in front of multiple internet appliances like a computer, notepad, laptop, mobile devices etc.; many chats and trading screens open up with too many papers scattered around and a mark of seriousness on the face. This is, therefore, the reason behind linking up a trader with a gambler. Most often, when we try investing through trading and it leads to a sudden massive downfall, we tend to relate stock marketing with gambling. This misconception is spreading like a disease among the people due to the lack of financial literacy in the country. Hence, it is a myth that needs to be clarified.

Stock Market or Gambling?

Before knowing the difference between these two terms, we must have a bird view of what the stock market is all about. The word ‘stock’ generally refers to commodities, goods, property, deposits etc.; and ‘market’ refers to business or trade (action of buying or selling the stock). Therefore, it won’t be wrong to claim that the stock market is the collection of exchanges where the shares of publicly held companies are bought, sold and issued. In other words, the share market or stock market is the venue where the shares of public listed companies are being traded. In this process, the trader invests money in a certain stock with the expectation of earning a profit when its value is increased in the upcoming days. Gambling on the other hand refers to making a profit through “luck by chance”. In this process, the gambler wagers a certain amount with the hope of winning the game and ultimately makes a profit out of it. The alternate word for gambling is wagering or betting.

Stock Market Trading Vs Gambling

These two terms are quite different from one another but the line separating them has been covered by some people who argue and believe them to be the same. And the two first and foremost traits that make the stock market and gambling go either way is “patience” and “time”. Sometimes, the traders need a few weeks or even several months before knowing a significant profit on their stocks. And then they hit the iron when it's hot i.e. they make through it once they are well aware of the profit on their stocks. So, we can clearly say that the stock market requires patience and time. Contrary, when you play in the sites featured in Onlinecasinos2.com the pace in the world of gambling becomes much faster than in the stock market. You can start a game and finish it in just a few minutes or an hour or two. And in that short period, your victory or defeat depends on your betting abilities.

The other two important factors that can differentiate the stock market from gambling are “intelligence” and “knowledge”. A good gambler can make merit through wagering or betting skills but to become a successful trader, one must have an intellectual mind and enormous knowledge on how the entire market functions along with proper training. Mere luck and conscience won't help to make it through the tough world of the stock market. A systematic and chronological order is the utmost requirement of the stock market, unlike gambling which depends on mere tricks and manipulative skills.

As aforementioned, patience, time, intelligence, and knowledge are the top traits that differentiate the stock market from gambling.

However, other two factors can also be included in the difference- “self-control” (stability or balance for strategic selling and buying of stocks)and “effort in learning”. Although there is a heavy risk in both these businesses of making money, as rightly said by Helen Keller- “Life is either a daring adventure or nothing at all.” So, we must not be too timid or squeamish about our actions because life is all about experiences. If we win, we’ll get what we desire and if we fail, we’ll learn. Our experiences are the one that improves our abilities and makes us a better version of ourselves. Thus, one must always remember if there is a risk, there is a reward! Moreover, the effort in learning the stock market is comparatively more than learning Gambling.

To sum up, we can say the Stock Market is way different from Gambling. However, in some cases, they may collide (depending on the individual’s mindset) but there are several many aspects in which they differ drastically and this difference cannot be neglected. So, it would be incorrect to state Stock market is similar to Gambling. They are different from one another and have always been.