Honestly, I dont like the distinction people tend to make with 'investing' vs 'trading'. I think all bets on the market are forms of speculation. The only difference between what some consider 'investing' and 'trading' is the time horizon, the former being "long term" whatever that means and the latter being "short term". The term in lengths of time is arbitrary to me. Mostly it is just some arbitrary distinction for tax purposes where 'trading' is treated as income and 'investing' is capital gains with a better tax treatment. While there are some who consider "investing" as exclusively the act of buying an asset with an intent of collecting dividends for the long term.</br > </br > But, if you are long of the options, you can call it investing. Long of calls only that is. Because if you are long of puts, you're betting against something, which akin to shorting, is not considered 'investing'. </br > </br > Some hedge funds take on massive positions in the options market before they enter an equity position because it doesn't have as direct an impact on the equity markets. Carl Icahn uses this strategy a lot with synthetic long stock positions. </br > </br > Overall, I think we should get rid of the differences. I think they are both "trading" and "investing" are the same. Someone who is "investing" "long term" in dividend payers, might themselves sell too if the company is about to file for bankruptcy. This could be "short term" too in the grand scheme since they are not holding it for decades and passing it on to their family. Ultimately, everyone is just risking money to make money. It doesn't matter what strategy you use, the fundamental act of risking money to make money is across the board. Even if you are an options seller, or a short seller. Yet somehow "speculators" often get looked down upon by "investors" and also they the "speculators" have less ideal tax treatment too because of their "trading" versus "investing". So my own view is they are one in the same. Except of course, tax treatment treats things differently.
