Gambling on the stock market: the behavior of at-risk online traders

Philippe Grégoire, Melanie Rose Dixon, Isabelle Giroux, Christian Jacques, Annie Goulet, James Eaves and Serge Sévigny

Review of Behavioral Finance, 2023, vol. 16, issue 2, 205-222

Abstract: Purpose - Online investment platforms offer an environment that may lead some traders into excessive behaviors akin to gambling. Over the last decade, gambling behaviors associated with the stock market have attracted the attention of many researchers but the literature on the subject remains scarce. This study aims to present the results of live interviews with a sample (N = 100) of retail investors trading online, and contrasts trading habits with gambling behaviors. Design/methodology/approach - Participants are divided in three groups according to their score on an adapted version of the Problem Gambling Severity Index (referred to as the PGSI-Trading), and their trading habits and behaviors are compared. Findings - The authors find that traders with higher PGSI-Trading scores are more likely to display gambling-related behaviors such as trading within a short timeframe, being motivated by making money quickly and experiencing high sensations when trading. Research limitations/implications - The sample is small but the authors proceeded this way in order to gather some qualitative data that would be helpful to clinicians in the Province of Quebec. The questionnaire used to classify traders at risk of being gamblers (PGSI-Trading) has not been validated. Practical implications - The findings of this study will be helpful to clinicians who hwork with patients suffering from excessive online stock trading habits. Social implications - Clinicians observe an increasing number of patients who consult with excessive stock trading habits. This study has brought new information allowing clinicians to better understand how gambling manifests itself on the stock market. Originality/value - To the authors’ knowledge, this study is the first to investigate the trading habits of individuals classified in terms of their score on an adapted PGSI questionnaire.

Keywords: Household finance; Finance literacy; Retail trading; D91; G41; G59 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rbfpps:rbf-05-2022-0143

DOI: 10.1108/RBF-05-2022-0143

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