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                                        The Key Differences Between Gambling & Trading

The Key Differences Between Gambling & Trading

15 Nov 2021

Whilst there are plenty of risks involved in trading and gambling, the two industries are completely different activities and should never be classed as the same despite the fact it could be argued that they share some huge similarities.

Many may have heard that gambling and trading used in the same sentence at times because of the amount of money that is essentially being bet on in order to turn a profit, however there are a number of different factors that are easily identifiable and huge reasons why the two sectors should not be considered to be intertwined with each other.

House Advantage

Gamblers will know everything about the advantage that the house has when playing casino games, however those that are trading and investing in stocks will not have to contend with it. Many of the games that are played at a live dealer casino, whether it be online or in a physical establishment, will have an outcome in which it is favourable to the house and not the player. Those that play a live dealer casino blackjack game will know that the casino will typically have a house edge of around 1.5% depending on the style of game played. In simple terms, the house edge is the money that gambling operators are able to make.

However, when it comes to trading, investors will have to deal with markets that do not have an advantage or a drawback to anyone when making the trade. Although there are still plenty of risks, strategies that have been built on solid information can prove to be successful for those looking to turn a profit, although anything can happen with the exchange that may be difficult to predict and calculate.

Gambling Incites Emotions, Trading Requires Rationality

Another reason why gambling and trading should never be considered the same thing is simply down to the thought processes that individuals involved make when participating in the respective activity. Those that gamble will want to be as rational as possible, however their emotions will typically spill over at times and get the better of them as an adrenaline rush can be felt with each hand or spin made in a live dealer casino game.

However, traders need to be calm and calculated individuals that will use rationality as an approach in order to do their jobs as successfully as possible. It has been suggested that where gambling can be fast and fun, trading can be boring and disciplined. Typically, traders will never bet on whether a stock will perform if it is likely to suffer, whilst gamblers might be more eager to take the risk and simply hedge their bets.

Profit Obtained at Different Speeds

Those that participate in gambling activities and playing casino games will, traditionally, be looking to turn a profit as big as possible and as quickly as possible. This, however, is completely different to those who work within trading, as they will be happy to be able to increase their profit gains over a period of time and at a steady rate. This method will generally give them a better chance of securing a profit over a longer-term than their gambling counterparts, who are more likely to suffer bigger losses as a result of the way they play.

Facts and Figures Separate Trading and Gambling

Gamblers will look to play against the odds that have been made available to them with the various games on offer, however traders will look at previous facts and figures to help them to make the best decisions when looking at a set of stocks to potentially purchase and invest in.

Traders will have a whole wealth of information available to them, whilst gamblers will unlikely be able to get any of that kind of information to help them play a game successfully. Indeed, gambling is all about chance and probability, whilst trading is educated and premeditated.

Trisha Reynolds

Written by Trisha Reynolds
on 15 Nov 2021

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