3 ms·

I'm not a fan of lotteries either but when someone plays a lottery, they have fair odds of winning. With trading, most of the time, they will lose and someone w

by xmprt 6y ago

I'm not a fan of lotteries either but when someone plays a lottery, they have fair odds of winning. With trading, most of the time, they will lose and someone with millions in the bank will win.

cactus2093 6y ago
What? You have a much higher chance of making money buying a stock than you do of winning the lottery. If you’re talking about “Most of the time”, most of the time you will lose the lottery, but make money on buying a stock, on average at the overall rate of return of the market as a whole.
- imtringued 6y ago
  You don't get a market return from day trading. The only way you can make money off of day trading is by providing liquidity and the amount of liquidity needed in a market is limited by volume. It's easy for commercial investors to push out retail traders because they can provide more liquidity. Retail investors (aka people buying stocks as investment) are unaffected by that limit.
  - qeternity 6y ago
    > You don't get a market return from day trading. The only way you can make money off of day trading is by providing liquidity and the amount of liquidity needed in a market is limited by volume. This isn't true in the slightest. Market makes might favor liquidity providing strategies but the vast majority of day traders do not. Retail day traders are trading lower volumes and do not move markets. They are much more advantaged in this respect (although they typically lack the informational edge of pros). > It's easy for commercial investors to push out retail traders because they can provide more liquidity. This just also isn't true at all. Everything has a price, including liquidity and as a perfectly fungible good, it doesn't matter who the seller is. Exchanges operate on price-time priority so if you provide liquidity at a better price, or before someone else, then it doesn't matter how big you are or how much you provide (within the context of vanilla ETPs relevant to day trading).
qeternity 6y ago
> I'm not a fan of lotteries either but when someone plays a lottery, they have fair odds of winning. You do realize that lotteries have negative expected value right? That means that the net losses of losers exceed the net gains of winners...it's the epitome of unfair. > With trading, most of the time, they will lose and someone with millions in the bank will win. This just sounds like someone with an anti Wall Street chip on their shoulder. In most industries, the "winners" have millions in the bank...that's how they got the millions.
ac29 6y ago
For every $1 spent on state lotteries, only about $0.65 is paid out as prizes [0]. Contrast that with something like roulette, which isnt particularly high EV for a casino game. It pays out about $0.95 for every $1 wagered. [0] https://fivethirtyeight.com/features/what-percentage-of-state-lottery-money-goes-to-the-state/ https://fivethirtyeight.com/features/what-percentage-of-stat...

by xmprt 6y ago

I'm not a fan of lotteries either but when someone plays a lottery, they have fair odds of winning. With trading, most of the time, they will lose and someone with millions in the bank will win.

cactus2093 6y ago

What? You have a much higher chance of making money buying a stock than you do of winning the lottery. If you’re talking about “Most of the time”, most of the time you will lose the lottery, but make money on buying a stock, on average at the overall rate of return of the market as a whole.

imtringued 6y ago
You don't get a market return from day trading. The only way you can make money off of day trading is by providing liquidity and the amount of liquidity needed in a market is limited by volume. It's easy for commercial investors to push out retail traders because they can provide more liquidity. Retail investors (aka people buying stocks as investment) are unaffected by that limit.
- qeternity 6y ago
  > You don't get a market return from day trading. The only way you can make money off of day trading is by providing liquidity and the amount of liquidity needed in a market is limited by volume. This isn't true in the slightest. Market makes might favor liquidity providing strategies but the vast majority of day traders do not. Retail day traders are trading lower volumes and do not move markets. They are much more advantaged in this respect (although they typically lack the informational edge of pros). > It's easy for commercial investors to push out retail traders because they can provide more liquidity. This just also isn't true at all. Everything has a price, including liquidity and as a perfectly fungible good, it doesn't matter who the seller is. Exchanges operate on price-time priority so if you provide liquidity at a better price, or before someone else, then it doesn't matter how big you are or how much you provide (within the context of vanilla ETPs relevant to day trading).

qeternity 6y ago

> I'm not a fan of lotteries either but when someone plays a lottery, they have fair odds of winning. You do realize that lotteries have negative expected value right? That means that the net losses of losers exceed the net gains of winners...it's the epitome of unfair. > With trading, most of the time, they will lose and someone with millions in the bank will win. This just sounds like someone with an anti Wall Street chip on their shoulder. In most industries, the "winners" have millions in the bank...that's how they got the millions.

ac29 6y ago

For every $1 spent on state lotteries, only about $0.65 is paid out as prizes [0]. Contrast that with something like roulette, which isnt particularly high EV for a casino game. It pays out about $0.95 for every $1 wagered. [0] https://fivethirtyeight.com/features/what-percentage-of-state-lottery-money-goes-to-the-state/ https://fivethirtyeight.com/features/what-percentage-of-stat...