Is trading Gambling or not .."What say You" Vote here.
- Thread starter ElectricSavant
- Start date
You know...the spread...cost of carry in some instruments...and so on...
Hedging can slow down the ebb of the flow giving you time in your direction...So if you were gambling you cut your red chip in half midway...
Hedging can slow down the ebb of the flow giving you time in your direction...So if you were gambling you cut your red chip in half midway...
So the point may be that Trading can be "not Gambling" ...
what say you readers ...lurkers and guests?
did you vote in the poll at the top of this thread?
DO NOT BREAK THE RULES..ONLY VOTE ONCE...
Michael B.
what say you readers ...lurkers and guests?
did you vote in the poll at the top of this thread?
DO NOT BREAK THE RULES..ONLY VOTE ONCE...
Michael B.
Gamble, Schamble, what the heck else are any of us qualified for?
If bank account is higher at month end, then all is good with the World.
I think that consistency can help define whether something is a gamble or not. My brother started "gambling" with card counting back in the 1970's, made big money consistently, went to the stock market, made some, lost some, then made it consistently...
Make Money= Good No Make Money = bad.
(I hate to get so technical, but you know how I am, LOL).
Don
Trading and Gambling have 2 traits in common... (1) risk of loss, and (2) uncertainty of outcome. However what they do NOT share is PROBABILITY OF OUTCOME.
Anyone who loses money in the markets is simply "out of his league"... in Red Forman terms, "A DUMBASS".
It's VERY, VERY easy to make a reasonable return in the markets. To make BIG gains requires lots of discipline and some luck.
Anyone who loses money in the markets is simply "out of his league"... in Red Forman terms, "A DUMBASS".
It's VERY, VERY easy to make a reasonable return in the markets. To make BIG gains requires lots of discipline and some luck.
The real question is .....are the markets valid businesses ?
And in particular those businesses whom depend on daily trading activity...are they valid ?
Gambling itself is a business...and a profitable one for those that have good management...
Likewise ....there are intraday stock players that make up a significant portion of the markets who have been in business for many years....
Once one understands why and how the markets exist...they can be valid businesses...
And in particular those businesses whom depend on daily trading activity...are they valid ?
Gambling itself is a business...and a profitable one for those that have good management...
Likewise ....there are intraday stock players that make up a significant portion of the markets who have been in business for many years....
Once one understands why and how the markets exist...they can be valid businesses...
First definition of "business" = The occupation, work, or trade in which a person is engaged.
So, I guess trading is a business. And, yes, gambling can be treated as a business. The family "Bible" - "Playing Blackjack as a Business" by Lawrence Revere.
Perhaps anecdotal evidence, but applicable I think.
Don
HeHe..don't forget "The Worlds Greatest BlackJack Book" by Lance Humble, PH.D. & Carl Cooper PH.D.
Lawrence Lance & Carl went back & forth IN the books between each other.
Lawrence Lance & Carl went back & forth IN the books between each other.
I would say that this approach is more suited to trading possible reversals on daily/weekly frames, based on high probability set-ups. As an example if you were short S&P500 around 1400 looking for a correction of say 50-75 points (or a lot more sometimes) and let's assume you were able to bet $300 per point (equivalent to 6 lots). To hedge you could have purchased Jan '07 SPY 143 calls for .85. Buying $10k worth of calls=~117. Assuming your max loss on this trade is ~$15k, S&P has to move 50 points against your entry. Assuming this has happened S&P would be trading @ 1450, where you would call it quits and close the position incurring @ $15k loss on the short. But what would the Jan 07 143 calls be trading at then? When S&P topped 1418 the bids were ~$1.50 bid which is equivalent to 76% increase on premium paid or $17,550. So assuming S&P has gone up to 1450 the calls would gain at least 100% a total value ~$20,000. So the final balance would be ~-$5,000 Gross, which in fact I think should be even less. So which one would be more of a gamble, with a hedge or without? What if you could calculate ratios that would almost eliminate risk if you were to be wrong in your analyses/timing?