Trading, investing, gambling – these are the words we meet a lot these days since, in the latest years, many people got interested in these activities. Also, there are those who are still confused, and who have problems to understand how all of that works. Let’s start with short definitions between these activities:
It’s an activity of buying or sharing “pieces” of a company with other companies or individuals. They usually hire trading agents who know how to do all of that.
We don’t need an explanation of this, but since we are here, we will repeat what we know. Gambling is a risky, but still entertaining and exciting game playing, when the people are testing their luck, so they can see if they are lucky enough to win some jackpot or smaller prize.
So, we won’t lose time explaining tiny details, and here are a few differences between stock trading and gambling.
1. Who is losing, and who is getting money
Casinos, and all the gambling activities in general, are made to give a negative return, which is an expected outcome. That’s why people are lucky when they get something. But, until that happens, they are losing huge amounts of money, and usually, the prize is much smaller compared to the piles of cash they invest in the game. We all also know that online gambling is now a huge thing, and the gamblers are always looking for a good website with games, that pays out their prizes, as it’s Uusimmatkasinot. On the other hand, the stock market, and the trading there, are made to give a positive effect. The market is giving the investors generally positive returns for their money, and even though it’s risky, they take that risk and go for it.
2. Who is giving the money
When it comes to gambling, the customer is the one who is paying for that risk we mentioned above. But, on the stock market, individuals are rarely present, and because of that, big companies are paying the investors to take the risks, and trade for them. So, we can say that gamblers are spending their own money, so they can get excited by the risks, and stock traders prefer to play safe.
3. For who are they “playing”
Stocks aren’t a game, and gambling is, and this is the main difference we will try to explain in this paragraph. In a casino, gamblers are playing against the house/online platform, and they are expecting to win money, so they can get out of an unpleasant situation. In stock trading, people are investing huge amounts of money so they can buy shares. If they sell them, the reward is also pretty big, according to the general value of the company they work for.
4. The speed of activities
When we invest in something, we risk losing our money immediately, since it’s expected we will “play big”, but wait long until it payoffs. Trading is day-to-day work, and the people who previously invested in something, are now trying to sell that, or buy even more. Usually, buying shares is cheap, and selling them in the future for a much bigger prize or outcome is something we hope and expect. But, when it comes to gambling, we can say it doesn’t require any knowledge since it’s a thing of luck. Some people even think they can “hack” the patterns, and beat the odds, and even if something like that happens, it rarely works out again.
5. These terms are not very strict
We all know that trading and investing are not just for shares. Those who are interested in new things, recognize these terms since they are widely used in the relatively new financial field – the cryptocurrencies. On the other hand, gambling is not just going to a casino or downloading an app on your phone. We can say that everyone who is staking money on luck is a gambler, and usually, these people don’t have much control over their activities, since they are putting money without thinking about the risk.
6. Stock market can be predictable
When someone is buying or selling shares, it directly changes the prices, and those who are into that can often predict how the prices will change and are it worth investing, or not. But, gambling is still a thing of pure luck and randomness. The prizes are increasing as you put more and more money on your bets. Who knows, you can get lucky in both of these fields, but you need to choose which one is less risky for you.
7. Who plays and who wins in the end
Not everyone can join the stock trading market, and these people should know a lot of things, especially about the economy and business. Usually, the traders are reasonable people, who have realistic expectations, and can nicely explain to those who hire them will work out or not. They are paid to trade, and after they complete the task, they can forget the offer even existed. In this case, the winner is the company who offered or bought shares on the market. But, in gambling, the situation is much different. In this case, individuals are those who bet, win, and lose, and their game depends on them. If they lose, they are those who spent their money. If they win, they are those who will go home with a nice amount of cash in their pockets.
Understanding the differences between activities that initially seem similar can be challenging since it requires a lot of knowledge, and dedication until the person gets every fact. Our advice is to avoid playing on things you don’t know or you don’t understand, so you can avoid unnecessary money loss. We hope this article will be helpful to learn more about some basic differences between stock trading and gambling, but also motivate you to explore them much deeper, especially if you are interested to become a part of them