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  1. #1
    Active Member StumbleTraderDB's Avatar

    Gambling or not -- NOT based on risk !!!

    I've noticed that all the debate over binary trading being a form of gambling or not are ALL about the level of risk. Some even say that one form of binary trading is gambling because it is too risky, but another form is not, simply because they think there is less risk involved. This even comes down to how many minutes for the expiry!

    To me, this is simply illogical; a merely subjective assessment that can have no definite answer. EVERYthing in life can be turned into gambling, especially if you wager money on it.

    Maybe the question should not be about "gambling" but "betting." Is binary trading really the same as betting, as with horse racing or other sports? Are brokers the same as bookies?

    To me, the answer comes down to one main question and its corollary: 1) Where does the money for the host and the winners come from? 2) What does it take to be a winner?

    In gambling, the money comes from the losers, plain and simple. Generally everyone puts their money into a common collection (a "pot" or the innards of a slot machine, for examples), the host (casino "house" or bookie, if not just a game among friends) takes a cut, and generally "winner takes all." Much gambling is based on a random outcome (roulette, slot machines), predicting the outcome of a sporting event (weighted so that probable winners don't pay much, if anything), or a competition in a game between players (e.g. poker).

    In regular trading, the money is generated by changes in the values of investments -- you actually buy something, even if it's just an electronic or paper representation of a "share" in a company. If the asset becomes more valuable, you sell it to someone who wants it at the new price and you make money and the other person now has the stock. And can't you make money when the value goes down by "selling short"? I'd like to know how that works, but anyway you can see the money flow is very different, and who gets the money and why is different, too.

    So where does binary trading fit? I don't think the money comes from having more losers than winners, does it? And there is skill involved, and it is not a game depending on sports teams or horses or playing better than opponents. Do the brokers tie the binary trades to the markets, somehow? I have sold trades early when they were going bad, saving a portion of my money, which is also unlike gambling, right?

    So, what do you think of my assessment? I don't gamble, and am new to this so I may be missing out on important considerations.

  2. #2
    Legendry Member Okane's Avatar
    Hey, we already have a discussion on this matter in the following thread:
    http://forums.binaryoptionsthatsuck.com/threads/10076-Gambling-or-Trading?highlight=gambling

    Please let's keep the discussion in there!
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  3. #3
    Active Member StumbleTraderDB's Avatar
    Yes, I know, and on THAT one, somebody pointed out that there was already a discussion on this matter in ANOTHER thread!

    But both of those haven't been posted to in something like TWO YEARS, so it seemed like a good time to start fresh.

    Please, oh great Master Member, forgive this humble Novice, if this reasoning is insufficient justification!

  4. #4
    Legendry Member Okane's Avatar
    Quote Originally Posted by StumbleTraderDB View Post
    Yes, I know, and on THAT one, somebody pointed out that there was already a discussion on this matter in ANOTHER thread!

    But both of those haven't been posted to in something like TWO YEARS, so it seemed like a good time to start fresh.

    Please, oh great Master Member, forgive this humble Novice, if this reasoning is insufficient justification!
    No, on that thread they just linked to a thread where they compare BO to Poker.
    Anyway looks like you have got your answer already in the thread I linked but of course,
    if anyone else wants to start fresh, don't let me stop you.
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  6. #5
    Administrator Martin Kay's Avatar
    First, i've answered your post on the thread okane mentioned. It's more the "money", or does it come from.
    Second, I think trading is not solely about holding some share or a paper. Look at the Forex industry, you've got marketmakers, ECN's and many more outfits. You never get to hold any share or piece of paper, yet no one argues it's trading. So the question is - how's trading different then gambling actually? You mentioned betting, yeah, might be a better way look at it. But since BO is a skill based game, would it be more like poker, gaming we should call it?

    The average off-shore broker is a bet/play/trade against the house platform. If we take scam out of the equation, brokers make money of the difference between winner and losers. assuming the same number of winners and losing are playing, the winners get about 85% in a good day, and about 10% refund for losers. See the difference? the broker always makes money. You need about 55-60% win rate to actually make money.

    Overall, i think your assessment is on spot. NADEX for example, or IG (same company actually, the first is US based the the second UK based), price their options differently. They are both being considered a Financial companies by the local authorities, and it's not CySec we're talking about here. Trading is much different there, takes much skill and knowledge to win a position. Returns are also higher, and so as your loss. I think we're about to see 3 types of brokers in the far-near future:
    1. Off-shore classic brokers, well regulated, no games, big companies, "betting" against the house
    2. BO exchanges - where traders are trading against other traders, paying fees to the house
    3. IG/NADEX style brokers, with strict regulations by CFTC and FCA(UK), harder to trade, less fun, but much more trading like
    and..
    4. the scam broker, this one you should avoid, and hopefully regulations would take serious actions against those
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