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Trading is NOT gambling

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If you spread your risk capital across multiple gambles, you reduce your reward potential rather than mitigating your risk. But beyond that, gambling and investing are very different. That’s why professional gamblers learn risk management to decide the amount of capital to gamble with at every stage. Gamblers also try to study their opponents or the game before putting in their bets to better understand the odds of a favourable return. With gambling, there’s no scope of finding helpful guides orready-made portfolios.

Although there are a few similar features to investing/trading and gambling, they are very distinct. Therefore, a trader should form a trading strategy and follow it with discipline. Considering the fact that the market is unpredictable, a wise investor always goes forward with a plan rather than playing with the odds. It is with discipline and patience that they make it to great profits. Put simply, trading is not like winning a one-time jackpot but is rather a steady source of income. This course will start from basics and will make you an expert.

Additionally, it is pertinent to note that the gambler is not allowed the exemption limit of ₹2,50,000 while filing the return of income. Guessing in the stock market might lead to gambling in the stock market. The key to success in diversification, monitoring, and follow the trends and respond quickly.

Is Trading in stock market gambling? Myth Debunked!

With IMS Proschool’s Certificate in Options Trading Course, you get to Practically Learn Options Trading on Sensibull. This course is for anyone wanting to learn options trading from a beginner stage & you can Complete It Alongside Graduation. After completing the course, you will be able to take the NISM Series 8 Derivatives Exam & be eligible for 100’s Of Curated Jobs on IMS Proschool’s job portal.

Every trade in the stock market is carefully analyzed before buying. A trader should know when to exit from the market well in advance. The best traders not only plan their entry into the market but also have their exit strategies in place before initiating a trade. In 2020, Robinhood generated $958 million in revenue, of which 46%, or $440 million, was derived from options trading. Robinhood’s options trading revenue grew 298% in 2020, relative to 2019, as the pandemic and government stimulus checks led to a boom in stock market trading by retail investors.

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Trading is a long-term game, but its short-term excitement appeals to many people. A winning trade provides them with the dopamine rush required, whereas a losing trade induces great pain. The casino will ensure that gambling is a zero sum game for most of the participants.

If nine out of ten, individual traders make losses in derivatives, over different time periods and different sample sizes, it shows how useless and harmful derivatives are. Some feel the obvious step for the regulator would be to ban derivatives, but it is a complex issue. Some blame individual traders for getting attracted to the casino called derivatives like moths to fire. Anyways, speculation and gambling are not inherently wrong. Both have their own pleasures, benefits and a role in the financial world.

Trading, on the other hand, is more about being boring and being disciplined. Adrenaline can be a disadvantage in trading as it forces you into irrational decisions. From a psychological point of view, that is a crucial difference between gambling and trading. On successfully completing the options trading course from IMS Proschool, students will be able to take the NISM Series 8 Derivative Exam. Once you pass the exam, you will receive the certificate from NISM.

Caution for New-Age Millennial Traders: Stock Market is not a Place for Gambling

Search Stocks Industry-wise, Export Data For Offline Analysis, Customizable Filters. Pay 20% upfront margin of the transaction value to trade in cash market segment. The “top-down” and “bottom-up” methods are two ways of judging and picking a stock for investment. Learn how these investment modes differ and which one you should choose.

Trading in calls and puts is exciting and it can give you handsome profits. You need to understand that exiting a trade with a small loss can save you from incurring big losses which in turn can save a lot of money for you. For example, say an investor has $900 to make use of on a selected trade and wishes probably the most bang-for-the-buck. However, XYZ also has three-month calls out there with a strike worth of $95 for a price $3. Now, as an alternative of shopping for the shares, the investor buys three call option contracts.

Pick the Right Options to Trade in Six Steps

The $2.26 is referred to as the premium or the price of the choice. When shopping for an ITM option, the dealer will want the choice’s worth to maneuver farther into the cash to make a revenue. In other phrases, investors buying call choices need the inventory worth to climb excessive sufficient in order that it at least covers the price of the choice’s premium. Options include an upfront fee cost, referred to as the premium, that buyers pay to purchase the contract. Most people would tend to blame the mushrooming broking firms providing algo trading that lure traders with fast mobile apps and ‘sure-fire’ trading strategies.

Here are some key aspects on the basis of which; trading is grossly different from pure gambling. Although the returns may not be as lucrative as the returns traders may enjoy by trading frequently, but one will not have to worry about the day to day fluctuations of the market. People who do not have much time to devote to thinking about growing money on a daily basis should opt for the investing option. Before we begin with the discussion you need to understand that to make handsome profits you will have to take your options trading as a business. Like any other business, trading also can give you good profits and even losses. So how seriously you take it as a business will determine how much profit that you will get.


Now the the truth behind this perception is like extracting water from milk. Believe us, Once you understood What Is Options Trading And How Easy It Is, it will be at your fingertips you will be making someone understand What Is Options Trading And How Easy It Is. A derivative contract that allows traders/investors to buy or sell assets like stocks, ETF’s, Bonds, Securities at pre-determined price within specified date is called ” Option “. Options gives you authority to trade in both direction it does not matter market is bullish or bearish. So, we have explained you the first part of the title What Is Options Trading And How Easy It Is, Now let’s explore the second part.

In India, Sensex has returned an impressive around 15 per cent CAGR in the past 42 years. After three months, he again came to see me, and said he wanted to trade in stocks since some of his friends were making money in trading. I advised him against trading, and told him that the profits his friends have made would soon disappear and turn into losses. Trade stocks without leverage by using limit orders instead of market orders.

To acquire a position equal in size to the 200 shares mentioned above, you would want to purchase two contracts. This would bring your complete funding to $6,800 (2 contracts x a hundred shares/contract x $34 market value), as opposed to $26,200. Check your securities / MF / bonds in the consolidated account statement issued by NSDL/CDSL every month. Options trading allows you to buy or sell stocks, ETFs etc. at a specific price within a specific date.

Open Free Demat Account

A derivative contract that allows traders/investors to buy or sell assets like stocks, ETF’s, Bonds, Securities at pre-determined price within specified date is called ” Option ” . And the procedure to make profit by buying or selling the option is known as Options Trading. Options trading provides variety of opportunities to make profit in stock market.

You can always look at trading websites and online trading platforms in case you’re stuck somewhere. Remember, as long as a trader seeks knowledge about the stock market, and does not get disheartened by initial losses, he will make his way through. One question that many people have asked us is about how to gain profit from options trading. The real answer to this question, as we have seen from our vast experience of trading in options, is that if you want to earn profits then you should be comfortable in booking losses as well. If you know when to book a loss and get out of an options trade, the profits will start flowing very soon. Whether the trade was profitable or not is dependent upon the investor’s complete expense of buying the contract and any fee to course of that transaction.

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New choices merchants must also avoid shopping for OTM puts or calls on stocks with very low implied volatility. Conversely, an OTM put choice would have a lower strike value than the market value. An OTM option signifies that the option has yet to generate income as a result of the stock’s worth hasn’t moved enough to make the choice profitable.

While both gambling and investing in stock market involve taking a good amount of risk, the relation stops there. You need not necessarily make handsome returns from the stock market, just because luck favoured you at a casino, betting game or gamble. To get good returns from the market, you should stay invested for long periods of time and safeguard yourself from frequent trading initially.

  • One thing you need to remember is that you need to accept both profits and losses with an open mind.
  • Whether the trade was profitable or not is dependent upon the investor’s complete expense of buying the contract and any fee to course of that transaction.
  • Companies compete with others to innovate their products and provide better services, thus leading their stock prices to rise.
  • A typical example of gambling in stocks is people trying to make short profits from the minute market movements by trying to perfectly time the market.
  • When it comes to gambling, you do not have access to such scientifically proven methods.

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‘Bitcoin is a gambling token, and it doesn’t have any intrinsic value’ — Warren Buffett – Cointelegraph

‘Bitcoin is a gambling token, and it doesn’t have any intrinsic value’ — Warren Buffett.

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You can check about our products and services by visiting our website You can also write to us at , to know more about products and services. We all know the famous analogy of the gambler who goes to Las Vegas and makes a stunning profit on the first day. On the second day he makes a small loss and the tries to gamble more to recover the loss. In the process, he ends up losing all the profits made by him on the first day and more. Profits appear to come fast but more often than not they are a mirage. Trading, on the other game, is a game of skill and discipline.