With the wild moves in the GameStop GME stock,
and AMC Entertainment AMC,
or last week, for cannabis manufacturers, it is not illogical for some to think of the stock market as a casino, a description recently used by Sen. Elizabeth Warren, the Massachusetts Democrat.
In an interview with Axios that aired on HBO, Stacey Cunningham, president of the New York Stock Exchange, unit of the Intercontinental Exchange ICE,
said he rejected that comparison.
“Markets are not a casino. They are highly regulated and are highly supervised … We are managing a market that offers opportunities for investors to enter, invest in the companies they believe in, believe they are going to grow in, and then share this 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 built, say, in a game of blackjack.
Academic research suggests that stock market trading and more traditional games of chance have a lot in common. A newspaper published in January states that there are 3.5 times more gambling on the stock exchanges than in more traditional places, such as casinos and lotteries.
The article – by Alok Kumar from the University of Miami, Houng Nguyen from the University of Danang and Talis Putnins from the University of Technology Sydney and the Stockholm School of Economics – states that the U.S. and Hong Kong have higher per capita levels than they call playing on the world stock market. They identify so-called lottery stocks by looking at the volume divided by market capitalization and looking for unusually high rates.
This is not to say that every investment in the stock market is a game. The researchers say that about 15% of the volume of the US stock market is associated with gambling, a percentage that reaches 30% in the stock markets of China and Thailand.