Gambling-ish stock trading fascinates addiction neuroscientists and other researchers, as there are striking similarities between day trading, online stock options, and cryptocurrency trading on one side, and gambling and fantasy sports betting on the other.
Comparing stock trading to sports gambling (which I recently reviewed here), we see some speculative stock trading and fantasy league betting sharing core behavioral similarities. In each, participants frequently stake money on uncertain, competitive outcomes and receive unpredictable, variable rewards—the same pattern driving gambling disorder.
For example, a key component underlying gambling addiction is the illusion of skill. In speculative stock betting or trading, users believe data analysis, expertise, or strategy can overcome randomness. But outcomes are also heavily influenced by market volatility. In addition, emotional triggers often include a dopamine rush caused by anticipation, the thrill of winning, and the urge to “chase” losses after setbacks. (Chasing losses means the person continues to gamble because they believe they must be due for a win by now.)
Both are socially reinforced—traders through their online communities and fantasy players through leagues, group chats, and competition. Both may become identity-based (“I’m a savvy investor”). Each activity escalates from low-risk entry engagement through higher stakes, increased frequency, and emotional dependence, making individuals highly susceptible to behavioral addiction patterns despite the activity being framed as skill-based rather than gambling.
Recently, a psychometric paper introduced the Trading Disorder Scale (TDS) to assess disordered stock trading among amateur investors. The scale was created to help determine if a person has a stock trading disorder and needs intervention and treatment.
Day-Trading Addiction
In gambling or day trading, money is often placed on a highly uncertain risk, and the individual could lose the entire stake. When leveraged trading becomes frequent, short-term, and speculative, stock traders refer to it as placing bets on stocks rather than investing.
Two extensive surveys of Dutch stock investor studies reported 4.4% of all investors meet the criteria for compulsive gambling in financial markets, and another 3.6% for “problem gambling.” The investors exhibit core addiction features like failing to stop or cut down, preoccupation, loss of control, persistence despite harm, depression, and suicidality. Some traders interviewed in another study regularly used addiction and gambling metaphors, calling it a “rush,” or saying “I cannot stop” when describing problematic trading.
The 1929 Crash
Andrew Ross Sorkin’s new book, 1929: Inside the Greatest Crash in Wall Street History, is a bestseller describing human folly, greed, and optimism fueling the crash. Sorkin said risky bets using debt—leverage—was a root cause of financial crises like the one in 1929. In behavioral addiction terms, the lure is a fast profit, supported by the illusion of control, and the belief that “this bubble/time is different”—all hallmark features of gambling disorders. Sorkin showed the same mindset that drives gambling also drove speculative trading in 1929.
Sorkin documents that many people in 1929 were not investing or buying a small piece of a company they trusted and admired. Instead, they speculated that rising prices would continue, driven by envy, greed, and the use of borrowed money (leverage) to get rich. But the crash changed everything for decades.
The book Animal Spirits by Nobel Prize winners Akerlof and Nobel Laureate Robert Shiller provides insight into the underlying psychological forces that encourage gambling-like behavior in markets. The authors revive the notion of “animal spirits” or irrational exuberance, false confidence, fear, and greed, as well as news stories reinforcing this time, everything’s different. They emphasized the role of narratives describing people getting rich, fueling speculative bubbles from the Tulip Mania in the 17th century to the current dot-com, bitcoin, crypto, and possibly artificial intelligence (AI) bubbles, in which prices rise because of herd behavior, not actual value.
Online Sports, Gambling, and Stock Apps
For a subset of traders, their behavior resembles drug or gambling addiction. Lee et al. conducted a systematic review of the association between gambling and financial trading, showing through analysis of 12 studies that financial trading (stock trading, day trading, and cryptocurrency trading) is associated with higher risks for problem gambling.
Gambling emphasizes short‐term wins and immediate outcomes. Similarly, frequent trading is a high-risk behavior with a progressive inability to stop and a preoccupation with trading. Risk factors in trading may overlap with gambling risk factors such as young age, personality traits like impulsivity and sensation-seeking, and psychiatric conditions like ADHD, anxiety, depression, and substance use disorders (SUDs).
Features like instant access with mobile apps, zero-commission fees, and a gamified interface make stock trading more like a casino than a considered investment. The design of modern mobile trading platforms increases accessibility, speed, the dopamine brain rush, and reward/punishment feedback loops. Winning big is euphorogenic and may feel like taking cocaine.
For the young and impulsive with prior addiction or gambling issues, the best advice might include limiting speculative trades, avoiding leveraging, and monitoring their time spent, money risked, and emotional states.
Financial losses can be traumatic and hard to forget. New neuroimaging evidence shows that losing money activates brain regions in the anterior insula, which are also activated by physical pain, suggesting that “financial loss hurts” more than metaphorically. These losses are not easily processed or forgotten because they engage systems that evolved to remember severe pain, harm, and social threats.
The Oracle of Omaha
Warren Buffett is considered the greatest investor of all time due to his long-term success. His reputation is built on buying quality businesses at a fair price, holding them for the long term, and patiently waiting for opportunities to sell. Buffett’s behaviors are almost the opposite of the “trading-gambling” posture. The Great Depression in 1929 significantly influenced Buffett, even though he was born after the crash. Growing up then with a stockbroker father instilled a strong interest in finance and the importance of thriftiness, shaping his cautious approach to investing. He warns that frequent trading costs drag performance, and active traders underperform. Buffett emphasizes emotional control, avoiding herd behavior, and resisting speculative mania.
Summary
Similarities between day and option trading, cryptocurrency investing, sports betting, and gambling have been described in recent articles, which argue that modern retail stock trading resembles gambling in many ways: “Investment is distinct from gambling, but speculation and gambling have conceptual overlap.” Some experts say stock trading is unlike gambling because they own an investment rather than betting on a pure-chance outcome. But modern stock, crypto, day, and options trading pass the Duck Test: “If it looks like a duck and quacks like a duck, it probably is a duck.”