Mobile applications blur the line between investing and gambling
The rise in popularity of trading through mobile applications has changed the face of investing, erasing the line between smart investments and gambling. The pandemic has only accelerated this process, making it faster and more accessible.
Technological advances and the emergence of tools like 0DTE (zero-day options), leveraged ETFs, and memecoins have allowed young investors to achieve profits more quickly. At the same time, these tools have contributed to increased risks in financial markets. According to Bloomberg, such options now account for over 50% of daily options on the S&P 500 index. The volume of leveraged ETFs has grown to 240 billion dollars.
Regulatory bodies have faced new challenges. The Commodity Futures Trading Commission (CFTC) has attempted to limit the use of certain contracts, such as Kalshi, which are associated with elections and sporting events. During the Trump administration, PredictIt was legalized, adding nuances to this controversy.
Today, the trend toward speculative trading is developing against the backdrop of historic examples of stock gambling, which often ended in crashes. New tools, such as meme stocks and event contracts, make speculation not only easier but also more accessible to a broader audience. Law professor Ilay Bylin suggests evaluating operations using the formula P = E – C + M, which helps to distinguish investing from gambling.
| Tools | Attractiveness | Risks |
|---|---|---|
| 0DTE | Quick profits | High probability of losses |
| Leveraged ETFs | High growth potential | Possibility of significant losses |
| Memecoins | Popularity among youth | Price instability |
Given the development of technology and the integration of financial markets, new opportunities are opening up for investors. However, it is important to remember the responsibility and wise risk assessment that comes with every decision.
