Is Spread betting a form of gambling?

Clearly it's not investment in the classical sense. By the definition in that article, and I think also probably what most of us prefer to think of it as, it is speculation, rather than gambling.

However, it would seem that a high proportion of us (estimates vary, but tend to be around the 90% mark) are not very good at doing the necessary calculations associated with speculation, as opposed to gambling.
 
From a UK tax stand point it is gambling but it is regulated by the FSA not the Gambling Commission due to its unlimited risk nature.

From an expectancy point of view it can be a positive if you have a profitable system which means it is would not be gambling in the same sense of say Roulette more like card counting at Black Jack.

Spread betting differs from real trading in that you cannot earn the spread on your trades, you always pay the spread which is normally much wider than the underlying market, this reduces your profit expectancy and makes it harder to maintain a positive expectation especially if you trade often.
 
Last edited:
In my view it is gambling in the same sense that risk is being taken on an uncertain outcome and the same applies to trading in general......and for that matter probably life in general as well.


Paul
 
Paul71 said:
This industry is littered with cliches, such as...

'discipline, discipline, discipline', 'never hold on to losers', '90% end up losing', 'trading is like poker' and so on and so on. It's gambling ok, full on gambling, just accept it.
Click to expand...

You are spoiling it for me. After all these years I was beginning to believe that I was quite bright. :D
 
Paul71 said:
It's gambling ok, full on gambling, just accept it.
Click to expand...


Its not 'full on' gambling.

Playing Roullete is full on gambling.
Playing the Lottery is full on gambling.

Trading, card counting, study horse form etc, the long term outcome is not the same as the either of those if you do it well.
 
donaldduke said:
Its not 'full on' gambling.

Playing Roullete is full on gambling.
Playing the Lottery is full on gambling.

Trading, card counting, study horse form etc, the long term outcome is not the same as the either of those if you do it well.
Click to expand...



I don't agree, gambling is gambling. A person can be a professional gambler, but just because they can make a living out of gambling, doesn't mean to say that they are not gambling.

The long term outlook for trading has to be deemed 'uncertain', it has to be. Look at the response i got in my thread entitled, 'Business Loan For Trading', most, if not all people on this site wouldn't dream of taking out a sizable loan for trading.

The absence of posts made for uneasy reading if anyone actually thought that trading was not gambling.
 
courageoussoul said:
Do you think that spread betting is a form of gambling or an investment instrument?

Check this article; http://ezinearticles.com/?Is-Financial-Spreadbetting-a-Form-of-Gambling?&id=1764785
Click to expand...

Depends what you really want to know. Whether SB is gambling, whereas 'real trading' isn't? Or whether all trading is gambling in the dictionary sense, or whether all trading is gambling in the negative usage sense?

My answer would be all trading is gambling in the dictionary sense, and all non-competent trading is gambling in the negative sense.
 
For retail traders they do have exactly the same three parameters of risk, reward and strike rate. The only difference is where, on a scale of each, the different activities actually sit.


Paul
 
Paul71 said:
I don't agree, gambling is gambling. A person can be a professional gambler, but just because they can make a living out of gambling, doesn't mean to say that they are not gambling.

The long term outlook for trading has to be deemed 'uncertain', it has to be. Look at the response i got in my thread entitled, 'Business Loan For Trading', most, if not all people on this site wouldn't dream of taking out a sizable loan for trading.

The absence of posts made for uneasy reading if anyone actually thought that trading was not gambling.
Click to expand...

I think that gambling is an attitude, not an occupation. A person who has a gambling attitude to any business is unlikely to succeed at it. Most traders who want a loan to trade on margin should be treated with caution by banks unless they have colateral. Most traders would not ask for a loan from a bank, for trading purposes, because they know that it takes little capital to get started and they will soon know if they are good at it, or not, without getting into debt. It is a high risk business, no doubt about it, but I have been in one or two "legitimate" business start ups in my time and they have given me some sleepless moments, believe me, before they got off the ground. There is an element of luck in any business, location and competition are just as essential to any enterprise and requires considerablely more starting capital, in most cases.
 
I traded financial binaries/fixed odds for over two years, i would only bet when the odds the bookie offered looked really good. I made a small fortune.

Then one day they increased the spread and changed the pricing algorithm. Prices were now almost never favourable and you couldn't bet the other way because the spread was so wide.
Taking those odds would be pure gambling..So I stopped trading binaries.
 
donaldduke said:
So trading to you is like playing roulette or the lottery?
Click to expand...



All are forms of gambling. If you don't believe me sell your house and trade with the profits, borrow the largest amount of money available to you and trade your way into the history books. No person who has ever posted on this site would even dare to consider this, but you and i will always read about how great and wonderful some of the posters have been. Uncertainty rules the trading day, week, month and year.
 
Splitlink said:
I think that gambling is an attitude, not an occupation. A person who has a gambling attitude to any business is unlikely to succeed at it. Most traders who want a loan to trade on margin should be treated with caution by banks unless they have colateral. Most traders would not ask for a loan from a bank, for trading purposes, because they know that it takes little capital to get started and they will soon know if they are good at it, or not, without getting into debt. It is a high risk business, no doubt about it, but I have been in one or two "legitimate" business start ups in my time and they have given me some sleepless moments, believe me, before they got off the ground. There is an element of luck in any business, location and competition are just as essential to any enterprise and requires considerablely more starting capital, in most cases.
Click to expand...



Split,

I wouldn't believe a, "good morning", from a blaggard that posts on a trading chat forum. Every man, woman and child that has ever posted on a trading chat forum has told lies about thier trading abilities. Ego rules the day, you see.
 
You must log in or register to reply here.

Similar threads

J
What is Spread Betting / Trading?
Replies
4
Views
7K
neil
neil
P
What if?
Replies
3
Views
2K
sminicooper
sminicooper
C
Spread betting..is it gambling or not?
2 3
Replies
41
Views
6K
new_trader
new_trader
B
Where spread betting profits come from?
2
Replies
22
Views
4K
KillPhil08
KillPhil08
V
UK Tax and Spread Betting
Replies
3
Views
3K
Spread-Bettor
S
Top