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are futures markets gambling in your eyes because speculators can participate?
by sitzkrieg 2y ago
are futures markets gambling in your eyes because speculators can participate?
- snakeyjake 2y agoYes.
- beejiu 2y agoI can only speak from a UK perspective, but many financial instruments can be used in a gambling sense by retail "investors". In 2019, our regulator banned binary options, saying this: "Binary options are gambling products dressed up as financial instruments. By confirming our ban today we are ensuring that investors don’t lose money from an inherently flawed product." https://www.fca.org.uk/news/statements/fca-confirms-permanent-ban-sale-binary-options-retail-consumers#:~:text=The%20FCA's%20rules%20are%20permanent,claiming%20to%20offer%20these%20products https://www.fca.org.uk/news/statements/fca-confirms-permanen.... Sound familiar? They also highly regulate CFDs and other financial instruments that are marketed to retail.
- _zgx0 2y agoFutures markets serve an important role outside of speculation, i.e. producers managing their future price risk. Betting markets do not.
- memkit 2y agoEverything in finance is isomorphic to some combination of borrow-lend agreements. Betting markets and futures markets are functionally one in the same. The only difference is the oracles and the series of bets required to construct your position.
- hnburnsy 2y agoAgreed but can entities also use the prediction markets to hedge against events that affect them directly or indirectly?