- There has been an increase in retail investors controlling gambling processing centers.
- Treatment can be limited, as doctors often don’t understand the condition or the stock market.
- This has discouraged some dependent traders and, at times, they have dived into the market.
Matt Widmann, a 35-year-old commercial fisherman from Alaska, knew he had a problem when he spent more time trading stocks than with his family. He traded for about seven hours a day, starting at the crack of dawn and ending in the mid-afternoon, usually too exhausted by the roller coaster of wins and losses to spend time with anyone.
Then, last February, it reached a breaking point. Widmann says he traded a few same-day contracts and lost nearly his entire portfolio – about $ 30,000 in life savings, split between shares of Nvidia, Tesla, and other stocks popular with retail traders.
“I was a mess. I was just crying on the couch. I was like, I don’t want to live anymore,” he told Insider.
Now five months “sober” from the stock market, Widmann realizes he is part of a larger wave of retail traders who have developed a gambling addiction-like problem in the two-year runaway pandemic market.
But aid is expensive, limited, and often led by doctors who don’t know much about the stock market itself. This is leaving some dependent traders feeling discouraged and sometimes plunging into the stock market after treatment.
It can be difficult to find help
There are no official diagnostic criteria for day trading addiction.
Experts say the lack of classification is one of the biggest obstacles for retail traders like Widmann looking for help. Lacking specific criteria for their condition, they turn to gambling addiction treatment centers, which have seen an influx of day-to-day traders.
“I watch [day trading] like gambling, “Dr. Timothy Fong, the co-director of the UCLA Gambling Studies Program, told Insider.” I have had many patients where I tell them, ‘You have developed harmful consequences due to your finance-related behavior. So, for insurance reasons, I’ll let you know, I’m putting it as a gambling disorder diagnosis. ‘ Because there is no financial mess in the trade, right? We don’t have it at all. ”
A spokesperson for Gamblers Anonymous New York told Insider that the organization has seen an increase of about 15% in the past year from daily traders who have called for help and, over the past two years, Fong estimates that his program at UCLA saw an approximately six-fold increase in day traders who called, from five per month to about one per day.
For those looking for it, help is not cheap. Algamus, one of the oldest gambling rehabilitation centers in the country, offers an inpatient program that costs $ 16,000, close to the low-end for such programs. Similar treatment can cost $ 5,000- $ 45,000, according to Algamus founder Rick Benson, and most insurance companies refuse to cover treatment if gambling disorder is the primary diagnosis.
In addition to costs, Fong believes there are limits to the amount that gambling treatment centers could help day-to-day traders, since those programs aren’t specialized for people who are addicted to the stock market.
“We think the same principles that work for gambling … for machines and poker, sports betting, craps, things like that, should work for an addiction to financial trading. But you can’t automatically assume that.” Fong said.
He also noted that therapists are often unfamiliar with the stock market itself, limiting the support they can offer.
“Many times when I ask patients, I don’t understand what they are trading. I don’t understand where the money went,” he admitted.
Widmann says the therapist he saw was only able to provide mood support.
“I don’t think they actually understood specifically what was going on with me,” he said. “They understood, ‘okay, you are experiencing financial depression, it’s like having some kind of compulsory behavior’, but I don’t think they understand the tangled nature of [retail trading]to be involved in something that both professionals are committed to and is full of degenerates. ”
This contrasts with the sense of community found online, in places like the popular Wall Street Bets forum, where traders share a self-deprecating yet mutual understanding of the ups and downs of investing. Widmann believes this is part of the problem and recalled the trade pressure created by these forums and the excitement of being in a Discord chat with other traders communicating in real time.
“It has become so obligatory because … you are in this group of people and you want to be part of what they are doing.”
Even now, Widmann isn’t sure he’s out forever.
“It crossed my mind again where it’s like, if I get a big enough position, maybe I’ll delight again. So I can’t say it’s a hard no.” Widmann said.
The desire to re-enter the market even after treatment poses one of the biggest challenges for industry providers, Fong said, and Algamus’ Benson added that it is one of the main differences between day traders and gamblers.
“[A day trader] he can live under the illusion that he really wants to invest, “Benson said.
He says one of the clinic’s biggest challenges is convincing traders that they weren’t “professional investors,” Benson said, and showing patients that their “bad investment year” is actually pathological. This involves a mix of play education, individual therapy and group therapy, which he believes is particularly important.
“Gamblers are formidable liars and bullshit. While in group therapy, the group works against this,” Benson said.
Dan Field, a gambling therapist who is creating a specific treatment program for day trading addiction, speculates that it has to do with a discomfort in accepting reality.
“They have that desire to get their money back and think this is just a temporary pit stop,” he told Insider. “So I try to talk to them as a counselor and as a friend. I care about you and that’s why I’m giving you this tough advice: you have to bear these losses for now,” she tells patients about her.