Options allowed the commodities markets to hedge risk so that, for example, citrus growers would not be financially ruined by an unpredictable weather year. But options can be used conservatively, or (with the outrageous leverage some banks were using) recklessly. Another problem is when the size of the market is distorted as with a stock with a very small float (% of outstanding shares), or as we saw last summer, when big institional investors and pension funds started to pile into the oil market, without ever having any intention of taking delivery on their contracts.]]>
The motivations of the stock trader aside, he is generally buying and selling things with at least some grounding in a legal reality. I say generally because there are those who purchase options, which are even further removed from an actual investment. That aside, the stock picker certainly can act like a “speculator”, but not necessarily like a gambler. But giving money in exchange for something you think will be worth more in the future is not necessarily gambling. But if dealing with risk is gambling, then every profession which can be affected by randomness is one. See the California citrus farmers in the late freeze…]]>
Anyway, like I said, thank goodness I play boardgames and not these chance games:)]]>
That’s the first real, coherent argument I’ve heard for stocks as not being gambling. Thank you.
However, I still do have NO idea what “getting something for nothing” really means. Thank goodness I’m a boardgame geek and not into gambler:)
“So what’s it gonna be, McFly?! Are you in, or out?!”]]>
No sweat. You just time travel back to a point in the future when your sentence is over.]]>
On the other hand, blackjack and poker are games of skill (with an element of chance). Skillful play, especially in blackjack, can result in an advantage for the player. I have learned a card-counting system that allows me, under certain conditions, to have about a 2% advantage over the house. Not enough to live on, but enough to occasionally make a nice little profit.
Now, slot machines, roulette, the lottery – those you might as well just flush your money down the toilet.]]>
I know this isn’t really the topic but I just had to throw that in there.]]>