CNBC's Jim Cramer on Friday warned beginners against day trading. article The Wall Street Journal quoted from an article explaining how more investors are developing serious gambling addictions due to risky market trading.
“We need to help people who are becoming addicted, and we need to stop people who might become addicted,” he said. “After all, markets are made for investing, not day-trading to determine the direction of stocks. There's a big difference between informed investing and pure gambling.”
The Wall Street Journal's Gunjan Banerji documented how investors, mostly men, attended Gamblers Anonymous meetings seeking treatment for compulsive gambling in the market. Banerjee explained that many people were drawn into trading and gambling during this period. pandemic boomadding that other risky activities like sports betting are growing in popularity. Similar to sports betting, apps make it easy for anyone to trade stocks and cryptocurrencies, she continued. But while popular sports betting apps typically offer gambling warnings and hotlines, most brokerage apps do not, Vangeli wrote.
Kramer said he remembered being deeply involved in day trading 24 years ago and felt the article described him at the time, but he said he had extensive resources and a full-time research staff. He emphasized that he is a well-prepared expert. He now opposes such risky behavior for non-professionals, saying he instead recommends “buy and do your homework,” or investing to own rather than trade.
He particularly criticized trading based on options with a zero-day expiration, i.e. option contracts that can only be used during a single session. He said they are no different than betting on a touchdown on an app such as: draft kingshe suggested, is a safer way to gamble because it's more honest about the risks. He said there is no reason other than “pure greed” to drive people into zero-day options, and said the industry “encourages bad behavior.”
“Can we stop this gambling? No, it's instinctive,” Kramer said. “But can we certainly make a value judgment? And my value judgment is that we are feeding crap to those who have a huge stake in promoting options, namely the investment community. This means that the securities companies that rely on them need to be held accountable.”
