Article | Finance area | Year 2020
 

Compulsive gambling in the financial markets: Evidence from two investor surveys

by R. Cox; A. Kamolsareeratana; Roy Kouwenberg
  
  Journal of Banking and Finance 111(), p.105709

Abstract

This study shows that a group of individual investors in the financial markets displays symptoms of compulsive gambling, or an addiction to trading, based on a standard diagnostic checklist from the American Psychiatric Association. In a representative sample of Dutch retail investors, we find that 4.4% of the investors meet the criteria for compulsive gambling in the financial markets. Another 3.6% meet the criteria for problem gambling, which is a less severe form of gambling disorder. Investors with symptoms of compulsive gambling problems tend to follow a more active and speculative trading style, indicated by a higher frequency of stock trading, day trading and investing in derivatives and leveraged products.

Keywords: Individual Investors, Trading Behavior, Gambling