Stock, Options, and Cryptocurrency Trading Disorders (13:21)
Overconfidence, illusion of control, and other features in stock trading disorder parallel gambling disorder.
Broadcast Retirement Network’s Jeffrey Snyder discusses the similarities between day trading and gambling with Mark S. Gold, MD, Washington University in St. Louis.
Jeffrey Snyder, Broadcast Retirement Network
This morning, stocks, options, and cryptocurrency trading disorders, and joining me now is Dr. Mark Gold of the Washington University School of Medicine in St. Louis. Dr. Gold, it’s so great to see you. Thanks for joining us on the program this morning.
Mark S. Gold, MD, Washington University in St. Louis
Thanks, Jeff. Thanks for inviting me.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, and I have to say, doctor, this is very compelling research. And, you know, I guess, anecdotally, this makes a lot of sense. But in your research, you’ve actually found compelling similarities between stock trading and sports betting and gambling.
Mark S. Gold, MD, Washington University in St. Louis
You know, it’s everything is becoming an addiction in a way. So people who are nihilists say, oh, that’s just another addiction. You know, we’re addicted to food.
We’re addicted to sugar. We’re addicted to gambling. We’re addicted to drugs.
And it may really be that we are because our brains are set up in a way to say, that’s good. Do it again. That’s good.
Do it again. So when we looked at gambling, we say, well, what are the gambling platforms look like? What are the stock trading platforms look like?
What are the compulsive gamblers look like? What are the compulsive stock traders look like? And when you compare the two, you find there’s great similarities.
And even just looking at people who are in the financial markets, asking them questions, you find a lot of them would be gamblers were it not for the constraints that the firm puts on them, that they have a gambler instinct and they have a gambling attitude. And it is very, very hard in a bull market when things are going up to be the naysayer and say, keep in mind that things don’t always go up. But because right now, if you are a gambler, you’re probably winning.
If you’re in the markets, you’re probably winning. But I did remind everyone because I read the 1929 book, but when you actually look at it, there are similarities. So the similarities between gambling and stock trading, the similarities with crypto and this can’t be ignored anymore.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. And just to kind of follow up on that, I mean, again, I don’t have your background. I didn’t conduct the research, but just on face value, anecdotally, when you look at the platforms themselves, I’m familiar with a lot of the trading platforms having been in the business for a long time.
I’m not familiar with the gambling platforms, but they kind of look similar in a lot of ways. And a firm like Robinhood, I read recently, has kind of blended. They are in the investment and crypto space.
So they offer that service, but then they’ve kind of gotten into the gambling platform as well. So I don’t know how you feel about that, but it just seems very interesting to me how analogous it is.
Mark S. Gold, MD, Washington University in St. Louis
Well, how I feel about it is I feel like that’s a very smart thing for you to bring to the table here. Like, honestly, if they were so different, why would they be blended in a common platform? If gambling was so different, why could researchers develop a trading disorder scale using the gambling disorder scale that academics like me use all the time and just changing items here and there?
So you do see this mostly in day trading, but it’s so difficult. This has been a really hard article. I write almost once a week for psychology today, and I’ve covered all kinds of topics.
And the topic that preceded this was on athletes, professional athletes, who are also highly prone to gambling. And as you’ve seen with some of the arrests, they’ve been involved with a variety of game fixing and in the moment fixing. It’s a big, big thing.
So then when I wrote that, one of my colleagues at Yale wrote me back and he said, you missed the biggest kind of gambling, and that’s stock gambling. And I hadn’t even thought of it. So I said to Brian Furlein, who, as I mentioned, is a professor at Yale, I said, OK, that’s a good point.
I’ll read 1929. I’ll look at the rating scales and see, you know, what’s the overlap. And it turns out, you know, it’s the duck test.
If it quacks and looks like a duck, it’s a duck. So Robin Hood figured this out, and they’re just doing what comes natural to them, which is both sports and stock trading.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. And you bring up the NBA insider gambling scandal, you bring up some of the ref issues that have occurred, things in Major League Baseball. Based on all this, there are many states that are now legalizing gambling.
Missouri, where you are in the show me state at Wash U, just started gambling December 1st, online gambling December 1st. I mean, do we need to put some breaks, some regulations, some guardrails around these types of things? I mean, I don’t think you’re going to stop human behavior, but do we need to protect people from themselves?
Mark S. Gold, MD, Washington University in St. Louis
Well, I mean, I think the guardrails come in when you talk about young people like teenagers and maybe college students, maybe college athletes. I mean. I read Charles Barkley’s interview about his gambling, and it was really striking.
At one point, he said he lost 10 million dollars. You know, this is amazing amount of money. And he even said he lost two and a half million dollars in six hours of blackjack.
There may be just something about professional athletes testing themselves and being out there. It’s the same dopamine system. So I do think there’s, you know, as being a futurist looking ahead, we will see some people who are dopamine deficient.
The brain’s pleasure molecule, if you will, might have a greater tendency to get addicted to almost anything, whether it’s gambling, sugar. Pornography. These are all really related, and it goes back.
It’s a funny thing in my field. It all goes back to original cocaine research that we did at Yale, which cocaine was not considered addicting. Just like these things aren’t considered addicting.
Cocaine wasn’t considered addicting in the 1970s, even in the 1980s, throughout the cocaine epidemic, because it wasn’t like alcohol or other traditional addicting drugs. It didn’t produce a profound withdrawal. It just produced a state that I can’t get enough.
I can’t get enough. Can’t get enough. And once cocaine was then declared clearly addicting, gambling could, because it didn’t have a withdrawal, but it had a continued compulsive use despite consequences, doubling up, losing everything, then coming to the family and saying, you know, I bankrupt us and we have to move out of our house.
Jeffrey Snyder, Broadcast Retirement Network
As far as treatment goes, I mean, how does a professional, for someone who wants to be treated, let’s just say that the writing’s on the wall. They’re the person that you just mentioned who came to the family, said we lost everything. I need help.
So they come to that realization. That’s a very important part with treatment. But how do you treat somebody who’s got a gambling addiction, a stock trading addiction, a cocaine or drug addiction?
Is there a way to treat them so that you no longer have the need for that dopamine secretion, for lack of a better term?
Mark S. Gold, MD, Washington University in St. Louis
No, that’s perfect. And honestly, we don’t have medical treatments like a medicine. So while opioid use disorder might have three medicines that we use that are approved by the FDA, for gambling, we don’t really have that.
And for sex, we don’t have that. For pornography, we don’t have that. For all these kind of behavioral addictions, we have very, very little.
So the first rule in addiction is whether it’s alcohol or cannabis or any drug, the earlier you get identified or you identify that you’re developing a problem, the easier to treat. The more it’s ingrained in your brain, the more difficult it is to treat. So if you see something, say something and get help.
There are hotlines and helplines that have been around since the 1980s that help people find Gambling Anonymous and experts on gambling treatment. But it’s not that simple, because some people who develop these behavioral addictions have ADHD. Other people who develop them have reward deficiency or they were born with not enough dopamine.
They’re kind of depressed. Other people have substance use disorders. And so within the gambling universe, experts would take people out of it and treat them specifically.
For stock traders or gambling, most of the treatments are based around what we call CBT or cognitive behavioral therapy. And it works around how you’re not very special. You’re not the only one that can see this.
You don’t really have inside information. Now, for professional athletes, they actually have inside information.
Jeffrey Snyder, Broadcast Retirement Network
They do.
Mark S. Gold, MD, Washington University in St. Louis
But for the person looking at the computer, the whole market’s going up. It’s not like they felt it or they have anything really special. And in that regard, rather than thinking about Animal Spirits, which was a book in your field about the importance of behavior in stock enthusiasm, curb your enthusiasm is better than just going blindly with Animal Spirits.
So I think we do have treatments. The treatments work. The earlier the person is identified, the better.
But there’s so many comorbidities or co-occurring problems that it may be as easy as helping a co-occurring problem go away.
Jeffrey Snyder, Broadcast Retirement Network
And lastly, doctor, you mentioned that there are treatments. How do I find someone who’s a specialist in this particular area? Say I’m just a layperson.
I identify my spouse as someone who is struggling with this.
Mark S. Gold, MD, Washington University in St. Louis
Do I go to the American Association of Psychiatry? A Gambling Anonymous meeting is a place to go. Many times a company will have in-house experts.
The teams have in-house experts. One of my colleagues who wrote a paper recently with me from Harvard, Kevin Hill, works for a couple of the teams. So there are a lot of experts that are working with these teams to try to prevent the gambling catastrophes that resulted in criminal prosecutions.
Yeah.
Jeffrey Snyder, Broadcast Retirement Network
I think this is just my personal opinion. I think we’re just scratching the surface when it comes to the impact of gambling and also day trading. Dr. Gold, we’re going to have to leave it there. It’s great to see you. Thanks for joining us. Great research.
And we look forward to having you back on the program again very soon, sir.
Mark S. Gold, MD, Washington University in St. Louis
Well, thanks for finding me. It’s not often that I’m found by people that are working in your space. So I’m really grateful.
Jeffrey Snyder, Broadcast Retirement Network
Well, we’re grateful for your research and we’re grateful for you coming on the program. Thank you, sir. That’s all for this morning’s episode.
We’re back again tomorrow with another great program. Until then, I’m Jeff Snyder. Stay safe, keep on saving, and don’t forget, roll with the changes.