Online Stock Trading vs. Online Poker
 

Hypothetical Situation:
Recently legislation was passed making the online trading of stocks illegal. The emergence of online trading had allowed millions of Americans to trade stocks on a daily basis, from the comfort of their home. However, recent studies show that the average American knows very little about stocks, causing their trading results to be primarily based on luck. However, thankfully, the American government has stepped in to protect its citizens from themselves. No longer will Americans be able to trade stocks online as they please.





much different from what they've done with poker? discuss.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

Lock please for misleading Subject Title

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

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Lock please for misleading Subject Title

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I hate misleading Subjects as well, but I think most of us figured this was satirical prior to opening it.

As for the topic, the non-gambling public likely won't see true gambling in the same light as investing with risk. Comparisons to day trading and wild speculation could carry more weight, of course.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

Online Gambling and poker is raked by shady off-shore companies.

Online Gambling and stock trading is raked by upstanding Wall Steet firms that are owned by and employ hundreds of past Senators, Judges, etc.

See the difference?

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

Stock trading is simply buying and selling of portions of companies. What is even remotely illegal about that? I think it is kind of silly to try to make the argument that the stock market could be a grey area.

Yes, there are some people who use the stock market to feed their “gambling itch”, but there are also some don’t use glue to stick things together.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

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but there are also some don’t use glue to stick things together

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That is why in many places you have to show ID to buy glue or you have to be over 18.

Poker is merely the buying and selling on the likelyhood of the arrangement of a few pieces of paper called cards, what is even remotely illegal about that?

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

What's the difference? I'll point out a few.

1.) Investing contributes to U.S. GDP and is taxable. Offshore poker operations do not.
2.) A decent poker player can potentially have a bigger edge with less uncertainty (at modest stakes) than a "decent" investor.
3.) To almost anyone outside of poker, the difference is that poker is a game of chance and investing is a game of skill. You won't be able to convince them otherwise since they live in the real world and you are some kooky gambler.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

I think the argument that the OP is making is that I, having no skill at investing, can risk/gamble tons of my own money daily with my online broker without any due diligence. I can, for example, randomly pick stocks available for trade with my broker. Heck I can even assign randomly stocks from my effective universe of the NYSE, AMEX, and OTCBB names and throw then on a roulette wheel. Then pick my investments based on a spin. I could throw options and due this on margin if I wanted to.

I'm sure someone can show examples of people who are addicted to day trading, and how it's had a negative effect on lives for that matter.

Does't the book "Random Walk Down Wallstreet" prove on a daily basis stock movement is random - and determined by the luck of the draw?

If the argument here is that long terms experts have been shown to make a profit, we all know the same holds for poker.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

[ QUOTE ]
What's the difference? I'll point out a few.

1.) Investing contributes to U.S. GDP and is taxable. Offshore poker operations do not.
2.) A decent poker player can potentially have a bigger edge with less uncertainty (at modest stakes) than a "decent" investor.
3.) To almost anyone outside of poker, the difference is that poker is a game of chance and investing is a game of skill. You won't be able to convince them otherwise since they live in the real world and you are some kooky gambler.

[/ QUOTE ]

All of these are completely false, except the last one is not as glaringly wrong.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

[ QUOTE ]
What's the difference? I'll point out a few.

1.) Investing contributes to U.S. GDP and is taxable. Offshore poker operations do not.
2.) A decent poker player can potentially have a bigger edge with less uncertainty (at modest stakes) than a "decent" investor.
3.) To almost anyone outside of poker, the difference is that poker is a game of chance and investing is a game of skill. You won't be able to convince them otherwise since they live in the real world and you are some kooky gambler.

[/ QUOTE ]
1. This is the very argument that the WTO is presenting. It's not an excuse to ban poker. I can invest via an offshore broker if I choose and I still have to pay taaxes. And they certainly can't ban only offshore brokers.
2. This is a great reason why poker is less of a gamble than the stock market.
3. You propose that people feel there's no risk in investing - I won't argue, but there's a reason why legally all those fund prospectus have that big disclaimer that says returns aren't guaranteed.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

[ QUOTE ]
I think the argument that the OP is making is that I, having no skill at investing, can risk/gamble tons of my own money daily with my online broker without any due diligence. I can, for example, randomly pick stocks available for trade with my broker. Heck I can even assign randomly stocks from my effective universe of the NYSE, AMEX, and OTCBB names and throw then on a roulette wheel. Then pick my investments based on a spin. I could throw options and due this on margin if I wanted to.

I'm sure someone can show examples of people who are addicted to day trading, and how it's had a negative effect on lives for that matter.

Does't the book "Random Walk Down Wallstreet" prove on a daily basis stock movement is random - and determined by the luck of the draw?

If the argument here is that long terms experts have been shown to make a profit, we all know the same holds for poker.


[/ QUOTE ]

Sorry Cake, my boy, Raven beat you to it:

http://www.marketwatch.com/News/Story/St...=&minisite=

I guess that may be the decisive point in the argument, unless someone has actually figured out how to teach a monkey to win at poker (Mike Matusow excluded)

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

http://www.karvy.com/articles/monkeyport.htm

is another great link. All hail the monkeys! Gods of stock selection! Is this how "Planet of the Apes" happened, when the monkeys finally realized they could suck up all the equity in the stock markets and enslave us?

There's still one thing I don't get about the original quote from "A Random Walk Down Wall Street" which states, "A blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by the experts."

Why does the monkey have to be blindfolded?? Are they so skilled at both stock selection AND darts that they could skew the experiment by aiming at "Google" and "Microsoft" on purpose?? If this is true, then SURELY it must be legal for monkeys to play poker, at least in NC.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

[/ QUOTE ]Sorry Cake, my boy, Raven beat you to it:

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I never claimed it was my idea or I was first to propose it. And whether or not index investing is profitable even for a monkey over the long term is not an argument I wish to take up. I'm simply agreeing that I have access to gambling on a daily basis with my brokerage account.

Re: Online Stock Trading vs. Online Poker
 

Because most people consider stock trading to be all skill when it is mostly luck. And many people consider poker to be all luck when skill is important.

Re: Online Stock Trading vs. Online Poker
 

The reason they're treated differently is because those people who believe that nearly any law is constitutional as long as they get enough votes for their side (Republicans and Democrats), keep winning the elections over those of us who vote Libertarian.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

[ QUOTE ]
[ QUOTE ]
What's the difference? I'll point out a few.

1.) Investing contributes to U.S. GDP and is taxable. Offshore poker operations do not.
2.) A decent poker player can potentially have a bigger edge with less uncertainty (at modest stakes) than a "decent" investor.
3.) To almost anyone outside of poker, the difference is that poker is a game of chance and investing is a game of skill. You won't be able to convince them otherwise since they live in the real world and you are some kooky gambler.

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All of these are completely false, except the last one is not as glaringly wrong.

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LOL no they aren't. Also, you might want to try backing up your incorrect assertions with some arguments. I can't wait to hear them.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

[ QUOTE ]
[ QUOTE ]
What's the difference? I'll point out a few.

1.) Investing contributes to U.S. GDP and is taxable. Offshore poker operations do not.
2.) A decent poker player can potentially have a bigger edge with less uncertainty (at modest stakes) than a "decent" investor.
3.) To almost anyone outside of poker, the difference is that poker is a game of chance and investing is a game of skill. You won't be able to convince them otherwise since they live in the real world and you are some kooky gambler.

[/ QUOTE ]
1. This is the very argument that the WTO is presenting. It's not an excuse to ban poker. I can invest via an offshore broker if I choose and I still have to pay taaxes. And they certainly can't ban only offshore brokers.
2. This is a great reason why poker is less of a gamble than the stock market.
3. You propose that people feel there's no risk in investing - I won't argue, but there's a reason why legally all those fund prospectus have that big disclaimer that says returns aren't guaranteed.

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1. I'm not saying that (1) is a good argument to ban poker and not investing. It's just a dumb argument that gets made by GOVT people. It is, however, a definite difference.
2. Right. If someone reads this and doesn't understand it or thinks it's wrong, then they are very confused about both poker and investing.
3. Again, I'm not supporting the claim. But by far, non-poker players will tend to think that the level of skill in investing far exceeds the level of skill involved in poker.

Re: Online Stock Trading vs. Online Poker
 

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Because most people consider stock trading to be all skill when it is mostly luck. And many people consider poker to be all luck when skill is important.

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You don't know what you're talking about.

Also, the government has enacted a number of laws and regulations regarding stock trading to protect the public from itself. Unless your account has $25,000 in it, you cannot buy and sell the same day more than 3 times a week. You cannot sell short in a retirement account. Mutual funds are forced to diversify. etc, etc

Re: Online Stock Trading vs. Online Poker
 

Sorry havent been around since first post. Here's a little back story so you know where im coming from:
My 18 year old brother recently liquidated a mutal fund he recieved 10 years ago, dropped all 15k onto scottrade, bought a couple books on trading, and took a shot. Its only been a few months and he has seen his his account reach as high as 33k, and drop as low as 5k. He's currently around even or whatever, but his account has seen bigger swings than my bankroll. However, the government hasnt tried to step in and save him from himself.

Re: Online Stock Trading vs. Online Poker
 

I don't think the issue is whether or not the government needs to protect you from making bad investments. And I certainly don't think it has anything to do with whether or not day trading should be limited/regulated/whatever. The point is more along the lines of, even if you take seemingly good, long-term investments, you still have no control over the movement of those investments. There is no guarantee that the market will continue to provide the same returns it has offered in the past, and a single, unpredictable catastrophe could devastate you. That is, the average investor is just sort of "along for the ride."

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

[ QUOTE ]
[ QUOTE ]
What's the difference? I'll point out a few.

1.) Investing contributes to U.S. GDP and is taxable. Offshore poker operations do not.
2.) A decent poker player can potentially have a bigger edge with less uncertainty (at modest stakes) than a "decent" investor.
3.) To almost anyone outside of poker, the difference is that poker is a game of chance and investing is a game of skill. You won't be able to convince them otherwise since they live in the real world and you are some kooky gambler.

[/ QUOTE ]

All of these are completely false, except the last one is not as glaringly wrong.

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Uh, please explain. The first two are very clearly true as far as I can tell. The last one is sorta a matter of opinion, but seems pretty true also.

2 seems like the most contentious point, so consider the following. Give an expert poker player and an expert stock picker anywhere from 1 dollar to 1 million dollars to start with and have them try to make as much money as they can in a year. The poker player will have a better ROI nearly 100% of the time. I think it gets close for a starting stake of around 5 million. With 10 million plus the investor is usually going to to do better. But regardless of the starting stake the investor will definitely book more losing weeks/months/years than the poker player unless he follows an investment strategy that is risk averse to the point of absurdity.

Re: Online Stock Trading vs. Online Poker
 

[ QUOTE ]
Sorry havent been around since first post. Here's a little back story so you know where im coming from:
My 18 year old brother recently liquidated a mutal fund he recieved 10 years ago, dropped all 15k onto scottrade, bought a couple books on trading, and took a shot. Its only been a few months and he has seen his his account reach as high as 33k, and drop as low as 5k. He's currently around even or whatever, but his account has seen bigger swings than my bankroll. However, the government hasnt tried to step in and save him from himself.

[/ QUOTE ]

Yikes, I think that may be YOUR job. GL.

Re: NEW LEGISLATION PASSED: ONLINE STOCK TRADING NOW ILLEGAL
 

[ QUOTE ]

2 seems like the most contentious point, so consider the following. Give an expert poker player and an expert stock picker anywhere from 1 dollar to 1 million dollars to start with and have them try to make as much money as they can in a year. The poker player will have a better ROI nearly 100% of the time. I think it gets close for a starting stake of around 5 million. With 10 million plus the investor is usually going to to do better. But regardless of the starting stake the investor will definitely book more losing weeks/months/years than the poker player unless he follows an investment strategy that is risk averse to the point of absurdity.

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Here's a better experiment. 4 participants: a top poker player, a top stock analyst, and 2 monkeys. Give each $1M and send the poker player and his monkey off to play internet poker, and the analyst and his monkey to each pick a portfolio. To make it a little more fair, say the ones playing poker are playing limit HE so the monkey just has to choose an action rather than how much to bet.

At the end of a year, the winner is the one who outpaces his monkey by the greatest %. I know who my money would be on (hint: I'd bet on the stock picking monkey to place).

Re: Online Stock Trading vs. Online Poker
 

Stock trading ( which is all online by the way)is very different then poker which can be played online or live. Stock trading is all long term and based on many different fields. You gotta be able to read company fincial reports and so on and understand them. Its not about buying stock on Monday and seeing it increase in value during the week then selling on Friday. Trying to compare poker to stock trading just doesn't add up, not the same.

Re: Online Stock Trading vs. Online Poker
 

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Stock trading ( which is all online by the way)is very different then poker which can be played online or live.

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Its not all online. My father still uses the telephone to call his broker for requests regarding his account. He has no online account whatsoever.


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Stock trading is all long term and based on many different fields.

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Flat out wrong. My brother buys and sells daily. How is that long term?

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You gotta be able to read company fincial reports and so on and understand them.

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Wrong again. Thats like saying "You 'gotta' be able to make 10ptbb/100 and ruin fools" if your gonna play online poker. Sure it would be great but being able to read financial reports is not a prerequisite for trading online

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Its not about buying stock on Monday and seeing it increase in value during the week then selling on Friday.

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Once again, an opinion. How about buying stock on monday and selling it on monday? Hate to tell you, but it happens thousands of times a day. To again compare it to poker, its like saying to a donkey "Its not about donking off stacks with top pair in a unraised pot". Could be good advice, but do you think every donkey doing day trading for fun is focused on the long term and not on what they make day to day? I know ive used a lot of examples that are situationally specific to me, but again my brother used to call me up every day saying stuff like "Just made $1500 today" or "[censored] im down 10% today what a beating".

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Trying to compare poker to stock trading just doesn't add up, not the same.

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When you seperate yourself from your opinions I think you will find that the similarities are vast.

Re: Online Stock Trading vs. Online Poker
 

[ QUOTE ]
Its not all online. My father still uses the telephone to call his broker for requests regarding his account. He has no online account whatsoever.



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The broker does it online
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Flat out wrong. My brother buys and sells daily. How is that long term?


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Yes, I forgot about day trading but that deals with more luck factor and long term is a losing way.

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Sure it would be great but being able to read financial reports is not a prerequisite for trading online


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Reading reports is a prerequisite for being a succesfull trader


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Could be good advice, but do you think every donkey doing day trading for fun is focused on the long term and not on what they make day to day? I

[/ QUOTE ]

Day traders are donkeys

Re: Online Stock Trading vs. Online Poker
 

[ QUOTE ]
[ QUOTE ]
Sure it would be great but being able to read financial reports is not a prerequisite for trading online


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Reading reports is a prerequisite for being a succesfull trader

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My point is that reading reports is not a requirement for day trading.
You obviously agree that its a prerequisite for being succesful (can't be successful without it), and anyone can day trade without having read these reports (uninformed "gambling" on stocks), so why should the government take away online poker whil protecting the rights of day traders?

Re: Online Stock Trading vs. Online Poker
 

Comparisons aside, the most important difference that exists between online stock trading and online poker has nothing to do with which is less risky or has a greater ROI and more to do with public perception largely created by stereotypes and reinforced by media. The suited monkeys in Washington could really care less about the skillset required to be sucessful at online poker or really what online poker is all about. Most are only motivated to do whatever is necessary to get re-elected and if backing a bill to make online gambling or poker or playing checkers illegal well then so be it. There's not much political incentive to ban online trading so it won't. Reality plays no role here, unfortunately.

Re: Online Stock Trading vs. Online Poker
 

[ QUOTE ]
Stock trading ( which is all online by the way)is very different then poker which can be played online or live. Stock trading is all long term and based on many different fields. You gotta be able to read company fincial reports and so on and understand them. Its not about buying stock on Monday and seeing it increase in value during the week then selling on Friday. Trying to compare poker to stock trading just doesn't add up, not the same.

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I laughed...

Re: Online Stock Trading vs. Online Poker
 

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There's not much political incentive to ban online trading so it won't

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Whats on line trading suspose to mean. ALmost all trading is done via online in one way or another.

Re: Online Stock Trading vs. Online Poker
 

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My point is that reading reports is not a requirement for day trading.

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I stand corrected and you are right. There is no requirement for day trading. Day trading could be compared to fish in poker, people that have no idea whats going on.

Re: Online Stock Trading vs. Online Poker
 

[ QUOTE ]
[ QUOTE ]
My point is that reading reports is not a requirement for day trading.

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I stand corrected and you are right. There is no requirement for day trading. Day trading could be compared to fish in poker, people that have no idea whats going on.

[/ QUOTE ]

David, based on the totality of your comments in this thread, it is clear that you have no idea what Trading is...

Re: Online Stock Trading vs. Online Poker
 

[ QUOTE ]
Stock trading ( which is all online by the way)is very different then poker which can be played online or live. Stock trading is all long term and based on many different fields. You gotta be able to read company fincial reports and so on and understand them. Its not about buying stock on Monday and seeing it increase in value during the week then selling on Friday. Trying to compare poker to stock trading just doesn't add up, not the same.

[/ QUOTE ]

[ QUOTE ]
My point is that reading reports is not a requirement for day trading.
[ QUOTE ]
I stand corrected and you are right. There is no requirement for day trading. Day trading could be compared to fish in poker, people that have no idea whats going on.

[/ QUOTE ]

[/ QUOTE ]


All of your statements are completely incorrect. You should really try and obtain some actual facts before posting garbage like this.

Even a monkey can spew feces on a wall... and sometimes he'll hit the target too.

Unfortunately you missed this time.

Re: Online Stock Trading vs. Online Poker
 

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Stock trading ( which is all online by the way)

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Is that true? I know they have computerized matching of prices now, and "pre-arranged" trades of huge blocks of stocks among parties, but isn't the vast majority of trades of NYSE listed stock still required to be traded via "open outcry" in the pits? Why are all those specialists milling about on the floor of the NYSE if it is all done online?

Re: Online Stock Trading vs. Online Poker
 

[ QUOTE ]
[ QUOTE ]
Stock trading ( which is all online by the way)

[/ QUOTE ]
Is that true? I know they have computerized matching of prices now, and "pre-arranged" trades of huge blocks of stocks among parties, but isn't the vast majority of trades of NYSE listed stock still required to be traded via "open outcry" in the pits? Why are all those specialists milling about on the floor of the NYSE if it is all done online?

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By online I mean via computer of course. Yes there are some milling around the floor but this takes in a large amount of different types of trades. Anyhow, this may be 100 or so but every investment office across America also trades online and not in person. There isn't a vast majority of trades of NYSE being done on the floor, I would be surprised if even 1% of trades are done on the floor. The problem being computers can do it so much faster and as you pointed out, have predetrimed buyinng and selling. One of the big dips (black Monday) in the past was because of computers and predetrimed selling points. I beleive regulation was brought in afterwards restricting some of this auto buying and selling.

Re: Online Stock Trading vs. Online Poker
 

I moved from online stock trading to poker simply because I realized stocks were more of a gamble for me. I got tired of watching my so called investments go down because of the many arbitrary goings on in the world, mostly unrelated to my own investment. I did spend a lot of time studying and learning all I could on the market and strategy, but the fact was, all the strategy in the world can't overcome natural disasters, man made disasters, or people waking up on the wrong side of the bed, feeling sad and deciding to sell and move to Florida. Stocks were like a crap game, with nearly as many ways to wager.

Poker was a game I understood better and required a bit less time to study, but you do have to study to get the edge. It has been a far more profitable "investment" for my needs. I have actually gotten myself out of the hole stocks put me in.

How anyone could say stocks aren't a gamble is beyond me, Even if the avg Rate of return is 10% a year, it doesn't mean your going to find the stocks that produce that, some win some lose, (some hands win some lose). Every day that you buy and sell your gambling it won't go up or down the next day with absolutely no.....zero.....way of knowing this to be true other than gut instinct. Poker has way more certainty than this.

Re: Online Stock Trading vs. Online Poker
 

Grats to David on the leveling job. I totally forgot about that part where I sign off before each of my blind trades that I reviewed the financial statements of the companies I'm purchasing.

As for the day-trading protection rules - similar protection devices can/have been enacted by card sites. You can't deposit more than X per day, per week, etc. None the less - despite these day trading rules, I can drop a load of cash on a single risky microcap OTCBB stock that I've never heard of this very instant with no due diligence and sell it today or a couple days from now. Or if I sign a form I can buy a ton of out of the money options if I so choose. It's very clear to me that I can gamble legally with my online broker.

Re: Online Stock Trading vs. Online Poker
 

I think one fundamental difference between poker and equity investment that has been overlooked in this thread so far is that poker is a zero-sum game (in fact, negative after the rake), whereas stock investment is a positive-sum game in the long run. The average investor is eventually a winner.

The purpose of day trading is to beat the market average (e.g. the S&P 500 index). If you measure "profit" as the degree to which you out-perform (or under-perform) the market average, then trading is a zero-sum game, simply by the definition of "average". But it's only zero-sum in comparison to the "benchmark"-- and the benchmark is positive. Which means that, even if you only "break even" relative to the benchmark, you're doing okay in the long-run.

In fact, the majority of professionally-managed mutual funds under-perform the market after commissions, so for an investor to just "settle" for the market average ain't so bad.

You don't need to be an expert to outperform the majority of "professionally manged" funds. And it's easy to do this-- all you have to do is buy and hold a well-diversified, market-representative basket of stocks, and you're guaranteed to be a "winning player" in the long-run.

But the point is, an investment "fish" is actually making money, whereas a poker fish isn't, and I think this makes all the difference.

Re: Online Stock Trading vs. Online Poker
 

[ QUOTE ]

Reading reports is a prerequisite for being a succesfull trader


[/ QUOTE ]

Not really. A good sized portion of the investing community believes that charts can reveal clues about future performance of a stock without regard to the underlying intrinsic value of the security. Certain patterns in the charts indicate to them how the average investor views the value of that stock and they make investment decisions accordingly. Financial reports also only show historical performance, which may have no relation to future performance. If Apple releases their quarterly earnings today and Steve Jobs croaks tomorrow, the stock will tank with no impact to the reports. Similar companies with similar earnings can be valued very differently because of people's perception of management, the product, trademarks, etc. And many people made a lot of money in the internet bubble trading on momentum and rumor alone. Companies that didn't even have prospects of earnings had larger market caps than GE. People who got in early and got out before the momentum collapsed got rich.

Logic isn't going to win this argument. As someone said, the U.S. has an economic interest in the market and none in offshore casinos. People spend money stupidly every day on TVs, iPods, cars, houses they can't afford, etc and wind up in bankruptcy. Why are they not protected? Because the U.S. has an economic interest in keeping them buying. They appeased the horse racing and Indian lobbies while throwing a bone to their conservative constituency to get reelected....nothing more...nothing less. The only way to deal with a law like this is to get enough people to complain and threaten their election chances next time. Logic isn't going to do it.

Re: Online Stock Trading vs. Online Poker
 

The Trading vs. Poker argument will take us nowhere--it will convince no one.