The chairman of the New York Stock Exchange says the stock market is not a casino. This is what academic research says.


With the wild moves in stock from GameStop GME,
+ 2.54%
and AMC Entertainment AMC,
-0.36%,
or last week at cannabis manufacturers, it is not unreasonable for some to think of the stock market as a casino, a description recently used by Sen. Elizabeth Warren, the Democrat from Massachusetts.

In an interview with Axios that aired on HBO, Stacey Cunningham, president of the New York Stock Exchange, a unit of the ICE Intercontinental Stock Exchange,
-0.21%,
he said he rejected that comparison.

“The markets are not a casino. They are highly regulated and highly supervised … We are running a market that provides opportunities for investors to come in, invest in the companies they believe in, believe they are going to grow, and then share in that wealth creation. “- President by NYSE 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 in, say, a game of blackjack.

Academic research suggests that stock trading and more traditional gambling have a lot in common. An article published in January says that there are 3.5 times more bets in the stock markets than in more traditional places like casinos and lotteries.

The paper, by Alok Kumar of the University of Miami, Houng Nguyen of the University of Danang and Talis Putnins of the Sydney University of Technology and the Stockholm School of Economics, says that the US and Hong Kong have the lowest levels. highest capita of what to call gambling in the stock market in the world. They identify so-called lottery stocks by analyzing volume divided by market capitalization and looking for unusually large ratios.

That is not to say that all investments in the stock market are gambling. The researchers say that about 15% of the volume of the stock market in the US is associated with gambling, a percentage that rises to 30% in the Chinese and Thai stock markets.

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