With the wild moves in the stock of GameStop GME,
and AMC Entertainment AMC,
or last week at cannabis makers, it is not illogical that some view the stock market as a casino, a description recently used by Senator Elizabeth Warren, the Democratic Massachusetts.
In an interview with Axios airing on HBO, Stacey Cunningham, president of the New York Stock Exchange, a unit of the Intercontinental Exchange ICE,
said she rejected the comparison.
‘The markets are not a casino. They are strongly regulated and are very closely monitored … We run a market that offers investors opportunities to enter, invest in the companies they believe in, they believe it will grow and then be able to participate in the wealth creation. ”- NYSE President Stacey Cunningham
It should be noted that casinos are highly regulated and supervised, but unlike the stock market, there are no long-term positions that can be built into, for example, a game of blackjack.
Academic research suggests that stock market trading and more traditional gambling have much in common. According to one article published in January, there is 3.5 times more gambling in stock markets than in more traditional venues such as casinos and lotteries.
The papers – by Alok Kumar of the University of Miami, Houng Nguyen of the University of Danang and Talis Putnins of the University of Technology in Sydney and the Stockholm School of Economics – say that the US and Hong Kong have the highest per capita levels of what they have called stock market gambling in the world. They identify so-called lottery stocks by looking at volume divided by market capitalization and looking for unusually large ratios.
This is not to say that all investments in stocks are gambling. According to the researchers, about 15% of the stock market volume is related to gambling, a percentage that amounts to up to 30% in the stock markets in China and Thailand.