Financial spread betting which is based upon pure speculation involving making speculative investments, has often been compared to gambling for many years.
We have often wondered if there is any truth behind this statement, we have found that there is only one major similarity.
This one similarity is a big one, and when you take gambling and financial spread betting via speculation the one main thing in common is that they both involve risk.
Both have an enormous degree of risk involved, studies and statistics have shown that there are in fact more losers than winners.
In gambling, one creates a situation which may jeopardize their financial well-being, and bets on the odds of preventing it.
Naturally, when they are on the winning end there is a nice reward for beating the odds of the situation.
However, as one continues to gamble, over time- the odds get higher for hurting their financial well-being.
The gambler does have the option to withdraw and it is quite easy, however, the prospect of to win will persuade them to continue their risk.
In speculative investments such as financial spread betting, one makes a selection based on the market and economic conditions and various historical graphs and statistics.
This is quite different then that of gambling in which no real knowledge is required.
The speculators need to have not only firsthand knowledge by means of data, they also need to have experience in order to be successful.
The trader must constantly keep up with market research and watch trends if they want to win.
It is also necessary to perform extensive studies on the company's profile, competitor behavior, current state of company performance and promising research and development.
One thing that gambling does not have in which speculative investments (such as financial spread betting) offer is that they are also capable of helping to boost a downwards economy.
This happens due to supply and demand and can get the economy back on an upwards swing.
With spread betting the investors can actually bet on the stock market, without actually owning the stock as an added boost.
Gambling on the other hand, provides no such benefit to the economy, and only benefits the establishments.
We feel the only thing the same with financial spread betting and gambling is the risk of financial devastation, a difference is with spread betting, you can help avoid total loss by implementing a good risk management system, whereas with gambling there is no such thing except to refrain from it.