What the law says
Trading shares, futures or options is regulated as investing, by the SEC and CFTC in the US and by the FCA in the UK. You pay, there’s uncertainty and you can win, so on paper it ticks all three boxes. The law treats it differently because markets exist to raise money for companies and spread risk, which a roulette wheel doesn’t. The UK even writes this into its gambling law. Spread bets regulated as financial products are excluded from the Gambling Act’s definition of a bet.
How it compares in practice
On results, the “it’s just gambling” crowd has a point. The best evidence comes from Taiwan, where researchers had every trade by every day trader over 15 years. Fewer than 1% of them were able to make money reliably after fees. A study of Brazilian futures traders found something similar. Of the 1,551 people who kept day trading for more than 300 days, 97% lost money, and the authors found no sign that people got better with practice.
The habits look familiar too. A 2024 research review describes “problematic trading” that shares many traits with gambling disorder, including chasing losses, an illusion of control and trading for the thrill rather than the profit.
What it means for you
Long-term investing in a broad index fund and day trading are very different things, even though both happen in the same app. If you day trade, treat the money like a gambling budget. Only use what you can afford to lose, and be honest about whether you’re making money once fees are counted.
Questions people also ask
Is day trading riskier than gambling?
It can be. A casino game has fixed odds you can look up. Day trading has no fixed odds, and with leverage you can lose more than you put in.
Is trading options gambling?
Legally no, options are regulated financial products. Buying short-dated options is close to a bet in practice, though, because the price has to move your way within days or the option can expire worthless.
Can day trading become an addiction?
Yes. Researchers describe "problematic trading" with the same signs as gambling problems, such as chasing losses and trading for the thrill rather than the profit.
Sources
- Barber, Lee, Liu and Odean, The Cross-Section of Speculator Skill: Evidence from Day Trading (Journal of Financial Markets, 2014)
- Chague, De-Losso and Giovannetti, Day Trading for a Living? (2019, revised 2020)
- Problematic trading: gambling-like behavior in day trading and cryptocurrency investing (2024 review)
- UK Gambling Act 2005, section 10 (spread bets)