After Recent Volatility in the Stock Market, Should Investors Take Similar Precautions to Gamblers?

After Recent Volatility in the Stock Market, Should Investors Take Similar Precautions to Gamblers?

As January came to a close, an extended trading frenzy descended on the stock market. 

A group of retail investors on the Reddit page r/WallStreetBets attempted to squeeze hedge funds stuck in short positions by investing heavily into their favourite stocks, such as shares in Gamestop (GME). Weeks later, the market is still incredibly volatile and the frenzy is showing no signs of slowing down.

Bloomberg reported that over a 20-day period, “an average 15.8 billion shares [were] traded each day on all U.S. exchanges.” Day trading and individual investing have massively gained in popularity in recent months, shifting a lot of stock market discussions away from traditional institutions and on to platforms such as Reddit or Robinhood. After the huge surge in GME stocks and subsequent crash, Robinhood and other interactive brokers clamped down on allowing trading of soaring stocks, citing their incredible volatility.

It was exciting for many to see small individual investors team up to take on Wall Street, but consumers have to be careful. Of course, the excitement surrounding this is leading many people to debate whether they should get involved in retail investing themselves. It is no doubt that there are many positives to stock investing. It takes advantage of economic growth, it’s the best way of staying ahead of inflation, they’re easy to purchase and easy to sell too.

The Risks

However, there is a huge amount of risk involved. Investing in stocks requires a lot of research and time invested to give yourself the best chance of being successful. Stockholders get paid last if a company goes broke, there is a huge amount of competition, and the huge amount of fluctuation in the market can make it an extremely stressful way to make money.

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It is important to note that retail investing is no different from placing a bet at the bookies – it’s gambling on an outcome. People should be wary of stock market trading’s likeness to gambling and should always make sure they are being responsible.

According to, there are a number of ways consumers can protect themselves when gambling online. Many of these actions overlap and can apply to investing and playing the stock market too. Here’s a few of them broken down. 

Deposit and Loss Limits

Deposit and loss limits are two of the most effective tools for managing your spend on gambling. Both limits can be set to an amount of your choosing, meaning that as soon as you’ve hit the limit you won’t be able to spend any more money. You can set limits daily, weekly or monthly to help stay in control. Many investing apps allow you to set stop losses, which automatically sells your shares if the price falls below a certain price that the investor has pre-set, and offer similar positives to deposit and loss limits found on casino sites. 


Self-exclusion allows you to limit or restrict your account for a certain period of time, which can be set at a few months to several years. This can’t be undone until the time period is over, so it’s a really helpful tool for those who need an extended break to help combat problem gambling. You can either self-exclude from individual sites, or via the GamStop national self-exclusion scheme, which extends their services to investing platforms as well. 

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Time Outs

If you think a shorter break is more suitable, most licensed casinos have ‘time out’ or ‘take a break’ settings which allow you to restrict your account for smaller periods, such as a day. Just like budgeting your money, setting time limits for your gambling and then taking a break can help maintain good habits.

Talk to Someone

Confiding in someone is always advisable if you feel that you may have an issue. Whether it’s a friend or family member, a dedicated charity or helpline, or even the customer service team of your chosen casino, speaking about your gambling or investing issues can help relieve stress and come up with solutions.

Don’t Gamble under the Influence

Gambling and alcohol don’t go well together, as you’re more likely to make bad financial decisions when under the influence. Alcohol can impair your thinking and judgement, meaning there’s an increased chance you’ll take risks and not follow any guidelines you’ve put in place. This is definitely something you should avoid.


If you want to take things a step further than self-exclusion, there is computer software available for download that restricts your access to gambling sites. These include programmes like Betfiler, Gamban and Gamblock, though bear in mind that some software may have to be purchased for a fee.

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