• Speculation In Futures Markets Is Pure Gambling Losses

The Key Difference Between Speculation And Gambling

The interesting thing about the ongoing debate surrounding the pros and cons of speculation is that those who favor a curb on speculative activity in commodity markets are most vocal during bull markets when prices are on the rise. Speculation in futures markets is pure gambling. It is not in the public interest to allow speculators to trade on a futures exchange. Chief among them is the effect of “pure” speculators — investors who buy and sell oil futures but never take physical possession of actual barrels of oil. These middlemen add little value and lots. Speculation is a bad word. Years ago, when I was working on stock market returns for my doctoral degree, my dad was quite embarrassed to tell his friends about my work. In his view, the stock market was a gambling den, even if his daughter was trying to show that returns are worth the risk. The usual distinction is that gamblers create risk for the purpose of betting, while finance allocates risk created from economic activity among willing investors.

Steve Sosnick, Interactive Brokers’ chief strategist, discusses the recent IPOs and the liquidity in the market.

Video length 00:09:36

Disclosure: The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the ...

Disclosure: The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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Speculation In Futures Markets Is Pure Gambling Losses