Is Stock trading a gambling or business?

Investing is to put money to use, to purchase or expenditure, in something offering profitable returns. We invest money on share trading expecting to get profits. When something is done in investing and if it gives a profit, it obviously becomes a business. So, share trading is a business not at all gambling. 

While investing and gambling have a few similar characteristics, they are very much different.

Stock Is Ownership: Investors must remember that they are purchasing ownership in a company when they buy shares of common stock. Investors own a very small portion of the company.  To gain an advantage and earn a profit on your stock trading, investors must try to gauge the company and its profitability.

Unlike investing where there are moderate winners and even some losers over the long and short term, gambling is a zero-sum game. There has to be a winner and a loser with gambling. Gambling takes money from a loser and gives the same money over to a winner every time. 

In investing, there can be varying degrees of winners and losers. There can be total losers or total winners, but because investors buy and sell instead of waiting for a gambling hand to be completely over, they can have partial winners and partial losers.  But, with gambling, no value is ever created. The value or money wagered is simply transferred from one gambler to another. With investing, companies increase their productivity and develop new products that improve people’s lives. Companies create profits and share those profits through dividends to investors.

What is API in stock market? 

An application programming interface, or API, is a set of programming code that queries data, parses responses, and sends instructions between one software platform and another. APIs are used extensively in providing data services across a range of fields and contexts. 

APIs, have become increasingly popular with the rise of automated trading systems. Many retail brokers now provide APIs that enable traders to directly connect their screening software with the brokerage account to share real-time prices and place orders. 

      KEY TAKEAWAYS

  • An application programming interface (API) establishes an online connection between a data provider and an end-user.
  • For financial markets APIs interface trading algorithms or models and an exchange's and/or broker's platform.
  • An API is essential to implementing an automated trading strategy.
  • More brokers are making their platforms available through an API.