yes, but wouldn't all types of trading be classed as gambling. As you are effectively betting weather it will go up or down.
When you buy a security you buy it from a counterparty which is not you're broker, but one that you don't know before settlement on electonic exchange (or that you know before, for block or pit trades). Your broker act as an agent not as the counterpart.The trade involves two Exchange members trading with each others and shares credited/debited at the custody.
You're betting when you deal with your "broker" as the ultimate end of the trade.
This let the spreadbetting company the choice to hedge you or not in the real market.
for Futures/Option it's the same principle you deal with a counterparty but the settlement is made by the clearing house who ensure that every customer with an interest in one or several contracts, maintain a margin based on recent volatility and offseting gross position (see SPAN). The clearing house decide which options sellers are exercised for example. If you sell an option to joe, that ends up in the money and is exercised by joe, it does'nt necessarily mean that you'll have to deliver, the clearing house might choose you in the lucky sellers that are not exercised (supposing all buyers did not exercised of course).
When you deal OTC with a SB it doesn't maintain any margin and you rely solely on 1.His own financial stability and 2.His will to pay you what he owes you, given that 3.He is the one that computes what he owes you and 4.The OTC market is not regulated
The OTC market is not regulated meaning in fact that it is regulated only by the contract that the two conterparties have together. There's nothing wrong dealing Interest Rate Swaps, Credit Default Swaps, Exotics Digital, Barriers, Asian options, Total return Swap mirroring say the S&P500 and allowing you to go over the spec limits of the CME . But you've got to do it with an ISDA Master agreement, preferably with a zero Threshold.
This is miles away from the contract that you have with a bucketshop which specifies that his quotes of the FTSE are the only ones in the world, that the exceptional market conditions that he faces allows him to do basically what he wants...
This makes SB undesirable for the customer as well as for the whole society...until the point it generates a lot of employment, corporate taxes and helps the whole Financial Industry in some way. Which doesn't seem to be the case in USA for now.
But even for real pass-through DMA brokers US PERSONS are not generally welcome due to the tax report paperwork involved.
