Some retail traders are turning to gambling addiction centers after a wild 2-year ride for stocks – but clinicians’ limited understanding of the condition and markets means help can be hard to come by

A croupier waits for gamblers at a table inside the Marina Bay Sands casino in Singapore April 27, 2010.

  • There's been an uptick in retail investors checking into gambling treatment centers. 
  • Treatment can be limited, as clinicians often don't understand the condition or the stock market. 
  • That's left some addicted traders discouraged – and sometimes diving back into the market.

Matt Widmann, a 35-year-old commercial fisherman from Alaska, knew that he had a problem when he was spending more time trading stocks than with his family. He would trade for around seven hours a day, starting at the crack of dawn and ending mid-afternoon, usually too worn out from the rollercoaster of wins and losses to spend time with anyone.

Then, this past February, he hit a breaking point. Widmann says he traded some same-day expiration contracts, and wound up losing nearly his entire portfolio – around $ 30,000 in life savings, split among shares of Nvidia, Tesla, and other stocks popular with retail traders. 

"I was a mess. I was just in tears on the couch. I was like, I don't wanna live anymore," he told Insider.

Now five months "sober" from the stock market, Widmann realizes he's part of a greater wave of retail traders who developed a problem akin to gambling addiction over the two years of the pandemic market's wild ride. 

But help is expensive, limited, and oftentimes, led by clinicians who don't know much about the stock market themselves. That's leaving some addicted traders feeling discouraged – and sometimes, diving back into the stock market after treatment.

Help can be hard to come by

There is no official diagnostic criteria for day-trading addiction.

Experts say that lack of classification is one of the biggest barriers for retail traders like Widmann who are seeking help. Lacking specific criteria for their condition, they turn to gambling addiction treatment centers, which have seen an influx of day traders.

"I view [day trading] as gambling," Dr. Timothy Fong, the co-director of UCLA's Gambling Studies program, told Insider. "I've had a lot of patients where I say to them, 'You've developed harmful consequences because of your behavior related to finances. So for insurance purposes, I'm letting you know, I'm putting this as a gambling disorder diagnosis.' Because there is no financial trading disorder, right? We don't have that at all." 

A spokesperson for Gamblers' Anonymous New York told Insider that the organization has seen around a 15% increase in the past year from day traders who have called to ask for help, and in the past two years, Fong estimates that his program at UCLA has seen about a sixfold increase in day traders who have called, up from five a month to about one per day.

For those looking for it, help doesn't come cheap. Algamus, one of the oldest gambling rehabilitation centers in the country, offers an inpatient program that costs $ 16,000, near the low end for such programs. Similar treatment can cost $ 5,000-$ 45,000, according to Algamus' founder, Rick Benson, and most insurance providers refuse to cover treatment if gambling disorder is the primary diagnosis.

On top of the costs, Fong believes there are limitations to how much gambling treatment centers might help day traders, since those programs aren't specialized for people who are addicted to the stock market.

"We think that the same principles that work for gambling…for machines and poker, sports betting, craps, things like that, should work for a financial trading addiction. But you can't just automatically assume that," Fong said. 

He also noted that therapists are often unfamiliar with the stock market themselves, limiting the support they can offer.

"A lot of times when I ask patients, I don't understand what they're trading. I don't understand the mechanism of where the money went," he admitted. 

Widmann says the therapist he saw was only able to provide mood support.

"I don't think that they actually understood specifically what was going on with me," he said. "They understood, 'okay, you're having some financial depression, you're like having some sort of compulsory behavior,' but I don't think they understood the intricate nature of [retail trading], to be involved in something that both professionals engage with and is rife with degenerates."

That contrasts with the sense of community to be found online, in places like the popular Wall Street Bets forum, where traders share a self-deprecating but mutual understanding of the highs and lows of investing. Widmann believes that's part of the problem, and recalled the pressure to trade created by these forums and the thrill of being in a Discord chat with fellow traders communicating in real time. 

"It grew to be so compulsory because… you're in this group of people, and you want to be a part of what they're doing."

Diving back in 

Even now, Widmann isn't certain he's out for good. 

"It's definitely crossed my mind again where it's like, if I get a big enough position, maybe I'll dabble in it again. So I can't say that it's a hard no." Widmann said. 

That desire to dive back into the market even after treatment poses one of the biggest challenges for providers in the field, Fong said, and Algamus' Benson added that it's one of the main differences between day traders and gamblers.

"[A day trader] may live in the delusion that he's really just investing," Benson said. 

He says one of the clinic's biggest challenges is convincing traders that they were not "professional investors," Benson said, and showing patients that their "bad investment year" is actually something pathological. That involves a mix of gambling education, individual therapy, and group therapy, which he says is particularly important. 

"Gamblers are terrific liars and bullshitters. Whereas in group therapy, the group works against that," Benson said.

Dan Field, a gambling therapist who is creating a treatment program specifically for day trading addiction, speculates it has to do with a discomfort in accepting reality. 

"They have that itch to get the money back and they think this is just a temporary pit stop," he told Insider. "So I try to speak to them as a counselor and as a friend. I care about you and this is why I'm giving you this hard advice: you have to sit with these losses for now," he tells his patients.

Read the original article on Business Insider

Post Author: martin

Martin is an enthusiastic programmer, a webdeveloper and a young entrepreneur. He is intereted into computers for a long time. In the age of 10 he has programmed his first website and since then he has been working on web technologies until now. He is the Founder and Editor-in-Chief of and Online Magazines. His colleagues appreciate him as a passionate workhorse, a fan of new technologies, an eternal optimist and a dreamer, but especially the soul of the team for whom he can do anything in the world.

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