With the wild moves from the GameStop GME stock,
and AMC Entertainment AMC,
or last week at cannabis makers, it is not illogical that some believe the stock market is a casino, a description recently used by Sen. Elizabeth Warren, a Democrat from Massachusetts.
In an interview with Axios that aired on HBO, Stacey Cunningham, president of the New York Stock Exchange, a unit of the ICE Intercontinental Exchange,
said he rejected this comparison.
“Markets are not a casino. They are highly regulated and supervised … We are leading a market that offers opportunities for investors to enter, to invest in the companies they believe in, they believe they will grow and participate in wealth creation. – NYSE President Stacey Cunningham
It should be noted that casinos are also highly regulated and supervised, although, unlike the stock market, there are no long-term positions that can be incorporated into, say, a game of blackjack.
Academic research suggests that stock trading and more traditional gambling have a lot in common. An article published in January says that there are 3.5 times more games of chance in the stock markets than in more traditional places, such as casinos and lotteries.
The newspaper – from Alok Kumar at the University of Miami, Houng Nguyen at Danang University and Talis Putnins at Sydney University of Technology and Stockholm School of Economics – says the US and Hong Kong have the highest per capita levels from what they call gambling on the stock market in the world. They identify so-called lottery stocks, analyzing the volume divided by market capitalization and looking for unusually large reports.
This does not mean that all investments in the stock market are games of chance. Researchers say that about 15% of the volume of the US stock market is associated with gambling, a percentage of up to 30% in the stock markets of China and Thailand.