The New York Stock Exchange president says the stock market is not a casino. Here is what academic research says.

With the wild moves in the stock of GameStop
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+ 2.54%

and AMC Entertainment
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-0.36%
,
or last week at cannabis producers, it is not illogical that some think of the stock market as a casino, a description recently used by Senator Elizabeth Warren, the Massachusetts Democrat.

In a interview with Axios aired on HBO, Stacey Cunningham, President of the New York Stock Exchange, a unit of the Intercontinental Stock Exchange
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-0.21%
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said she rejected this comparison.

“The markets are not a casino. They are highly regulated and they are highly monitored … We run a market that gives investors opportunities to enter, invest in the companies they believe in, they believe they will grow and then share in that creation. . ”- NYSE President Stacey Cunningham

Casinos, it should be pointed out, are also heavily regulated and monitored, although unlike the stock market, there are no long-term positions that can be built in e.g. A game of blackjack.

Academic research suggests that stock market trading and more traditional gambling have quite a lot in common. A paper published in January says there are 3.5 times more gambling in the stock markets than in more traditional venues such as casinos and lotteries.

The newspaper – from Alok Kumar from the University of Miami, Houng Nguyen from the University of Danang and Talis Putnins at the University of Technology Sydney and the Stockholm School of Economics – says that the USA and Hong Kong have the highest levels per capita. Inhabitant of what they have called stock market games in the world. They identify so-called lottery stocks by looking at volume divided by market coverage and looking for unusually large ratios.

This does not mean that all stock market investing is gambling. The researchers say that about 15% of the stock market volume in the US is associated with gambling, a percentage that runs as high as 30% in the stock markets of China and Thailand.

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