this post was submitted on 28 Oct 2024
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In gambling, the house always wins, by extracting value from the players. In stock trading, the players (capitalists) collectively always win, by extracting value from labor, technological growth, and natural resources. These are not the same picture.
Sure, you can take on as much risk as you like using derivatives, and emulate a gambler using the stock market as a source of randomness (volatility). But that's not how most traders behave, and it's not how most traders' payoffs work.
Not all gambling requires a casino/house.
Even in a home poker game, it is not possible for all the players to go home having made a profit, whereas that is very possible in the stock market due to growth, labor, and natural resources.
(The coal miner who gets a wage and black lung is not a player in the stock market. Neither is the sun, which provides free energy to agribusiness.)
Yes, general investing is not zero sum, however many methods of advanced trading are. Options trading, which is prominent and easy to access on Robinhood, is much closer to gambling (and is treated that way by many users) and is zero sum.
Most active trading strategies require successfully arbitraging, or extracting inefficiencies out of the market, and you can't do either of those things without someone else losing money.
Passive investment is investing in the companies that underlay the market, active trading is extracting value out of the market itself.