Natalie Leong Wei Lyn1
Hui Yu Yeo1
Claudia Choong Startup1
John Ming Yan Koh2
Vinh-Long Tran-Chi3
Cyrus Su Hui Ho4,5
Tji Tjian Chee4,5*- 1National University Hospital, Singapore, Singapore
- 2Changi General Hospital, Singapore, Singapore
- 3Faculty of Psychology, Ho Chi Minh City University of Education, Ho Chi Minh City, Vietnam
- 4Department of Psychological Medicine, National University of Singapore, Singapore, Singapore
- 5Department of Psychological Medicine, National University Hospital, Singapore, Singapore
Background: The Coronavirus Disease of 2019 (COVID-19) resulted in a global shift in gambling and trading behaviors. At present, a gap exists in understanding the relationship between excessive trading behavior and problem gambling, especially during the COVID-19 period. This narrative review analyzed (1) the changes in trading and gambling activity during the COVID-19 pandemic, (2) whether the pattern of trading activity resembles problem gambling, and (3) whether excessive trading and problem gambling share similar consequences.
Methods: We searched databases such as Medline, PsychINFO, Scopus, and Google Scholar using relevant keywords, and included 60 reports for narrative synthesis.
Results: During the COVID-19 pandemic, there were major changes to trading behavior, possibly due to market sentiments and psychology, personal financial needs, social media influence, and the behavior of other investors. The progression of the pandemic led to an increase in brokerage account openings and an increase in trading activities among existing investors, likely due to the development of digital trading platforms that enhanced accessibility for technology-adept investors. There was also a shift from gambling at physical destinations to online gambling, with an increase in frequency and spending among individuals who continued gambling. Feelings of boredom, stress, and the need for relaxation may motivate people to engage in gambling.
Conclusion: Individuals who engaged in excessive trading and problem gambling shared similar traits and may thus face similar psychiatric consequences. The findings indicate that we can apply the diagnostic criteria for pathological gambling and gambling disorders to excessive trading, given that many of these individuals meet the criteria for an addictive disorder.
1 Introduction
While stock trading is largely influenced by macroeconomic factors, regulatory policies, and fundamental analysis, cryptocurrency trading is driven more by market sentiment, speculation, and technological trends, making it resemble gambling in its volatility and risk-taking behavior, particularly when traders engage without proper knowledge or strategy (Kou et al., 2024).
1.1 Gambling behaviors
Gambling, defined as the activity of wagering something of a particular value with the possibility of obtaining something of a higher value (Potenza et al., 2002), is commonplace in many parts of the world. The prevalence of gambling is high at 26% of the world population, amounting to approximately 1.6 billion people (Casino.org, 2021). Different forms of gambling exist, broadly classified into traditional gambling and online gambling. Traditional gambling includes casino games such as roulette, lottery, blackjack, and poker, as well as racing and sporting events (Potenza et al., 2002). With the constantly advancing technological landscape, it is unsurprising that traditional gambling has given way to a new form of gambling online, which includes any form of gambling carried out on the Internet. The global online gambling market was valued at approximately 59 billion U. S. dollars in 2019 and grew to an estimated 86 billion U. S. dollars by 2024, with projections suggesting it will reach around 120 billion U. S. dollars by 2029 (Statista, 2024). The rise in online gambling can be attributed to various reasons such as increased accessibility (Gainsbury et al., 2012; Griffiths and Barnes, 2008; Kim et al., 2017) and anonymity and privacy, allowing participants to gamble in the comfort and safety of their homes (Corney and Davis, 2010; Gainsbury et al., 2012).
1.2 Trading behaviors
Trading refers to “the activity of buying and selling financial instruments such as stocks, bonds, futures, commodities, and currencies” (Guglielmo et al., 2016). This umbrella term includes a range of behaviors from investing in longer-term holdings to day-trading, which is the act of trading stocks within the same 24-h period, with decisions made on the subtle variations in valuation in order to make a quick profit (Arthur and Delfabbro, 2017). Due to the large range of financial instruments available in trading, this review will focus on the buying and selling of Stocks and Cryptocurrencies. Whilst we acknowledge that the terms trading and investing are two separate entities, for the purpose of this paper, the two terms will be used interchangeably to denote the buying and selling of financial instruments, as a careful delineation between trading and investing behaviors was unlikely due to the ever-changing mindsets of individual participants in the markets.
1.3 Problem gambling and excessive trading
Gambling behaviors, whilst often perceived as a harmless and entertaining activity, can evolve into a habit that risks becoming a public health threat (John et al., 2020; Shaffer and Korn, 2002; The Lancet, 2017). Such negative consequences include increased risk of psychiatric disorders such as depression and anxiety, financial issues, as well as psychosocial issues (Awaworyi Churchill and Farrell, 2018; Golin, 2001; Griffiths and Barnes, 2008; Mills and Nower, 2019; Reith, 2006). Problem gambling behaviors had been clinically defined to provide better assessment and treatment for this addictive and compulsive behavior (Blaszczynski and Nower, 2010; Lorains et al., 2011; Gainsbury, 2015). In the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV), Pathological Gambling, classified under the group of Impulse-Control Disorders Not Classified Elsewhere (American Psychiatric Association, 2000), was described as a “persistent and recurrent maladaptive gambling behavior.” Subsequently, it was renamed Gambling Disorder and classified under Substance-Related and Addictive Disorders in the DSM-V (American Psychiatric Association, 2013). Additional criteria of having to suffer “significant impairment or distress,” with certain behaviors demonstrated within the timeframe of 1 year, were added to the diagnostic criteria (American Psychiatric Association, 2013). Similarly for trading, motivation to engage in such behavior goes beyond the possibility of financial gains, with entertainment gaining traction as one of the major reasons for trading (Dorn et al., 2008). Some investors see trading as both a hobby and a form of gambling for entertainment (Dorn and Sengmueller, 2009). Excessive trading behaviors, however, have been viewed by the scientific community to be a form of addiction (Grall-Bronnec et al., 2017; Guglielmo et al., 2016) similar to gambling disorders (Grall-Bronnec et al., 2017; Guglielmo et al., 2016; Håkansson et al., 2021). Negative impacts such as depression, anxiety, as well as negative sequelae on financial and psychosocial areas, have been found to be associated with both excessive trading and gambling (Dixon et al., 2018; Grall-Bronnec et al., 2017; Guglielmo et al., 2016; Mills and Nower, 2019). Thus, the identification of high-risk individuals for these activities, and the extent to which they overlap, is essential and urgent.
The narrative review approach employed in this manuscript is employed to synthesize the most recent discoveries regarding behavioral changes in trading and wagering activities during the COVID-19 pandemic. This study adopts a narrative review approach, which allows for a broader synthesis of existing literature across multiple disciplines, including finance, psychology, and behavioral sciences. Unlike a systematic review, which is best suited for well-defined research questions with homogeneous study designs, a narrative review provides the flexibility to integrate diverse theoretical perspectives and empirical findings that may not be directly comparable. This approach enables a more comprehensive exploration of the economic and psychological influences on problematic trading and gambling behaviors while identifying critical gaps for future research.
1.4 Research aims
The COVID-19 epidemic has resulted in significant alterations in trading and gambling practices, although the existing literature lacks discourse on the correlation between excessive trading and problem gambling. This study specifically examines the impact of psychological, social, and economic variables stemming from the pandemic on impulsive and addictive behaviors, as physical trading venues and casinos were shuttered, resulting in a transition to online activities. This research aims to examine alterations in trading and gambling behaviors after the pandemic to ascertain if excessive trading signifies problem gambling and if conventional gambling diagnostics can be utilized to analyze trading behavior in this situation. These findings would facilitate a deeper understanding of the relationship between these behaviors in the context of a pandemic. Examples include social distancing measures and limits to public gatherings and “locking-down” of certain areas (Wilder-Smith and Freedman, 2020), an increase in the use of online gambling and trading platforms (Jenkinson et al., 2020), as well as experiences of social isolation, increased levels of tension, separation anxiety, and boredom (Brooks et al., 2020).
A notable gap exists in the understanding of associations between excessive, high-risk trading behavior and problem gambling during the COVID-19 period. While studies of this phenomenon in specific countries have already been conducted (Håkansson et al., 2021; John et al., 2020; Oksanen et al., 2022a; Oksanen et al., 2022b), there is a lack of global understanding of the associations between excessive trading and problem gambling across the world, which could be potentiated with the effects from the pandemic. Hence, this narrative review seeks to address the questions: To what extent do the characteristics of problematic trading behavior (stock and cryptocurrency) align with those of problem gambling, and can excessive trading be conceptualized within the framework of gambling disorder?
2 Methods
To carry out this narrative review, relevant databases including Medline, PsychINFO, and Scopus, as well as the first 200 records from Google Scholar as gray literature, were searched alongside hand-searching using combinations of search terms, such as Coronavirus, Covid, pandemic, trading, stocks, shares, cryptocurrency, investment, brokerage, problem gambling, addiction, excessive, behavior. The key papers and their findings were reviewed and discussed (Figure 1).
Figure 1. PRISMA flow diagram outlining the process of study selection and inclusion.
The inclusion criteria required that the studies (a) concentrate on trading and gambling behaviors associated with the COVID-19 pandemic, (b) utilize empirical data or a systematic review, and (c) be published in peer-reviewed publications. The exclusion criteria excluded literature that lacked an empirical foundation, studies that were not specifically focused on behavior changes related to the pandemic, and publications that were inaccessible in English.
3 Results
3.1 Effects of the COVID-19 pandemic on trading
The COVID-19 pandemic caused the fastest stock market crash in history. As the virus became more widespread, most stock markets across the globe experienced high sell-offs, causing them to become bearish. Lockdowns announced during the pandemic even caused trading halts on multiple occasions, as prices plunged more than 7% during the day and 5% at night (Bates, 2020). It is, therefore, unsurprising that the pandemic greatly affected investors’ sentiments and psychology (Naseem et al., 2021). Consequently, this has impacted trading activity across the globe in both quantitative and qualitative aspects. The included papers on the effects of COVID-19 on trading were summarized in Table 1.
Table 1. Summary of articles on COVID-19 and trading.
3.1.1 Effects on online trading
During the COVID-19 pandemic, more brokerage accounts were opened worldwide—including the USA, Germany, and Singapore (Aw, 2020; Ortmann et al., 2020). It was further observed that among the new brokerage accounts, there were more younger and inexperienced traders who entered the market in 2020 than in previous years (Chiah and Zhong, 2020; Fitzgerald, 2020; Gügercin and Richter, 2021). These individuals were more likely to be overconfident than experienced traders, fueling more risky trading behaviors (Gügercin and Richter, 2021).
The increasing trend of new brokerage accounts was aided by the development of digital trading platforms, which allowed young, technology-adept investors to access the stock markets more readily (Aw, 2020; Tang and Mahmud, 2021). Furthermore, such platforms had very low commission fees compared to traditional brokerages, making trading more accessible to the younger generation, including students. In the USA, examples of such platforms include Robinhood, TD Ameritrade, Charles Schwab, and Etrade; in Asia, Tiger Brokers, Moo Moo, POEMS, and Saxo Markets (Blystone, 2022; Reinkensmeyer and McKhann, 2022; Teo, 2022).
As online trading platforms gained popularity among the younger generations of inexperienced traders, experts were reportedly concerned about this trend (Tang and Mahmud, 2021), as younger investors were more likely to indulge in riskier trading behaviors (Ahmad et al., 2020; Riyazahmed, 2021).
3.1.2 Effects on trading volume
As with the opening of more brokerage accounts worldwide, trading volume and intensity also increased during the COVID-19 pandemic. In the UK, as the number of COVID-19 cases doubled, the average weekly trading intensity increased by 13.9%, largely fueled by increased stock and index trading (Ortmann et al., 2020). Both new and experienced investors also added more funds into their trading accounts as the number of COVID-19 cases increased. A similar trend was observed in India, where there were greater investments in shares, mutual funds, and life insurance during the outbreak (Riyazahmed, 2021). This increase in trading volume was especially prominent in males, older investors, and traders who perceived themselves to be more skillful in trading (Gügercin and Richter, 2021; Ortmann et al., 2020).
3.1.3 Risk factors of increased and excessive trading
Investor behavior and sentiments were affected by various internal and external factors. Internal factors that shaped investors’ behaviors include their demography, personality, past experiences in the stock market, and financial needs. On the other hand, external factors include traditional media platforms, social media, and the behavior of other investors. Given the combined effect of these internal and external risk factors on investor psychology, trading activity saw major changes as a result of the pandemic.
Possible risk factors for increased and even excessive trading behavior during the COVID-19 period included demographics, personality, psychological factors, as well as the influence of prior trading experiences and the behavior of other investors (evidenced in herding behavior).
3.1.4 Demographic risk factors
Studies on how investor demographics affect trading behavior with regards to the frequency of trade and risk tolerance have been conducted prior to the pandemic. It was observed that people of younger age, male gender, greater household income, and greater years of investment experience tended to invest more frequently, a pattern that was consistent even during the COVID-19 pandemic (Chin, 2021). Regarding risk tolerance, many authors expected the pandemic to cause a decrease in risk tolerance for investments due to fear, uncertainty, pessimism, and feelings of lack of control. Such sentiments appear to be shared in India (Himanshu et al., 2021) and China (Bäckman et al., 2020), where investors preferred more conservative portfolios. However, there were exceptions with certain groups of investors within the population (Himanshu et al., 2021; Riyazahmed, 2021). Demographic features of investors who demonstrated higher risk tolerance during the pandemic included males, younger investors, and investors who earned lower incomes (Ahmad et al., 2020; Riyazahmed, 2021). Interestingly, orphans were also noted to be greater risk-takers during the pandemic (Ahmad et al., 2020). It was hypothesized that orphans are used to taking risks from childhood due to the lack of parental figures, causing them to make riskier decisions in investments.
3.1.5 Personality risk factors
Apart from demographics, personality traits also played a role in affecting investment volume and choices. Both before and during the pandemic, it was observed that investors with higher neuroticism, lower extraversion, higher openness, higher agreeableness, and lower conscientiousness traded more compared to their counterparts (Chin, 2021). In comparison, investors who were more extraverted and conscientious were less likely to make changes to their trading behavior during the pandemic, as they were found to be more emotionally stable, judicious, and cautious when making investment decisions (Chin, 2021).
3.1.6 Influence on prior trading experiences
Personal experiences shape perspectives and affect decision-making, even in the aspect of investments. During the COVID-19 pandemic, two types of experiences were found to affect investors’ behavior. First, prior experience from gains and losses in the stock market affected investors’ risk-taking and herding behavior during the pandemic. Prior gains in the market led to riskier investing, while prior losses led to reduced risk-taking in investors from Delhi and Mumbai (Himanshu et al., 2021). Second, personal experiences of COVID-19 exposure and health risks affected investors’ risk tolerance. In Wuhan, people who had higher risk of being exposed to and infected by the coronavirus reflected greater fear regarding the pandemic, and this group of people demonstrated lower risk tolerance in investments (Bäckman et al., 2020).
3.1.7 Influence of other investors (herding behavior)
Herding behavior refers to the act of following the trading decisions made by others (i.e., follow the crowd), rather than making an informed decision based on personal convictions, self-analysis, or research. This behavior has been described as problematic as it drives baseless and irrational market rallies, leading to fads and asset bubbles which might eventually “burst” (Krokida et al., 2020). For example, the concerted buying of the Gamestop stock (ticker symbol GME) by online communities was widely attributed to a Reddit sub-community known as the “Wall Street Bets” and certain influential figures (Verlaine and Banerji, 2021). As a result, the price movement of GameStop’s stock prices became very volatile, and rose by more than seven times in 2021 (Osipovich, 2021; Verlaine and Banerji, 2021), arguably beyond its fair valuation.
In the first half to late 2020, herding behavior was observed across various countries’ markets, including the Gulf Cooperation Council Countries (GCC) (Abdeldayem and Al Dulaimi, 2020), Oceania (Espinosa-Méndez and Arias, 2021a), Vietnam (Luu and Luong, 2020), India (Bharti and Kumar, 2022) and Europe (including France, Germany, Italy, the UK, Spain, Russia, Poland, Czech Republic, Hungary, Croatia, and Slovenia) (Espinosa-Méndez and Arias, 2021b; Fang et al., 2021; Kizys et al., 2021). Herding behavior was observed to be amplified by the pandemic due to heightened fear, uncertainty, and expectations of pandemic risk, especially among less informed agents (Bharti and Kumar, 2022; Dhall and Singh, 2020; Yuan, 2021). As a result, less informed agents abandoned their beliefs and followed others, leading to market inefficiencies.
Studies on herding behavior during the “early” phases of the pandemic found mixed outcomes (Chang et al., 2020). For instance, three studies observed increased herding behavior in China during the pandemic (Hong et al., 2020; Luu and Luong, 2020; Yuan, 2021), but one study found reduced herding behavior instead (Wu et al., 2020). In Hong Kong, mild herding was observed in three sectors, i.e., banking, real estate, and state-controlled before COVID-19, but this phenomenon was weakened across all 3 sectors during the pandemic (Wen et al., 2022).
Herding behavior was also observed to be asymmetric depending on the market trend and industry (Hong et al., 2020; Yuan, 2021), being more significant during market uptrends, in the manufacturing and IT sectors, and in large and small-sized portfolios compared to medium-sized portfolios (Hong et al., 2020; Yuan, 2021). This was seen in a study of the Shanghai A and Shenzhen A share markets, where herding behavior was found to be more significant during market uptrends (Wu et al., 2020). The reasons for increased herding behavior (Hong et al., 2020) were suggested as follows: (1) for market uptrends, investors tended to buy more stocks in anticipation of a further rise in prices, while during market downtrends, investors might hold on to their stocks as they expect their losses to be reversed, (2) manufacturing and IT sectors were high-tech sectors which dominated the market, (3) large portfolios as they are more featured in the media, making it easy for investors to follow market trends, whereas (4) smaller portfolios received less attention by the media, and the relative lack of information caused investors to follow market consensus rather than make their own decisions.
In contrast, studies have found reduced herding behavior in the cryptocurrency markets during the pandemic. Decreased herding was observed in the top five cryptocurrency markets, including Bitcoin, Ethereum, Ripple, Litecoin, and Binance (Mnif et al., 2020), as well as in the USD and Euro cryptocurrency markets despite the increased volatility in these markets (Yarovaya et al., 2021). This unexpected trend was hypothesized to be a result of the conventional expansionary and non-standard policies by governments (Yarovaya et al., 2021) and their effect on investors’ sentiments and expectations of the economy. With increased central bank credibility, investors could have been more confident with more positive sentiments in their decisions, leading to reduced herding behavior (Krokida et al., 2020).
3.2 Effects of the COVID-19 pandemic on gambling
During the COVID-19 pandemic, fewer people were participating in gambling activities in general. Results from a study in the United Kingdom (UK) showed an initial decrease in gambling frequency in the first month of lockdown. Some studies attributed this to decreased accessibility of gambling venues, such as with postponement or cancelations of sporting events and closures of gambling destinations (Sharman et al., 2022). The papers on COVID-19 and gambling were summarized in Table 2.
Table 2. Summary of articles on COVID-19 and gambling.
3.2.1 Effects on gambling volume
Among individuals who continued gambling during the COVID-19 period, there was an increase in frequency and spending on gambling activities. A study by the Gambling Commission in the UK found that despite fewer “active player accounts” between March and April 2020, more engaged gamblers reported increased expenditure and time spent on at least one gambling activity (Gambling Commission, 2020). Similarly, a subset of participants from a study in Sweden reported increases in gambling problems (Håkansson, 2020). This trend was also found in studies from Greece, Iceland, and the United States (US) during the 2008 Financial Crisis, where a significant rise in risky gambling behavior strongly associated with severe financial adversity was observed (Economou et al., 2019; Olason et al., 2015). While fewer people may be engaging in gambling behavior during the COVID-19 pandemic, more avid gamblers tended to spend more time and money on gambling during this period.
3.2.2 Effects on online gambling
With COVID-19 movement restrictions in place, gambling activities shifted from physical destinations to online gambling. Many gambling venues, such as casinos, horse-racing tracks, bars and clubs with electronic gambling machines (EGMs), lottery retailers, betting shops, and poker rooms, faced closures in light of the lockdowns in March–April 2020 (Hodgins and Stevens, 2021). A systematic study in 2021 found an overall reduction in gambling frequency and expenditure, citing reasons such as the unavailability of live sports (22%) or canceled exclusive gambling on sports events (28%) (Hodgins and Stevens, 2021; Price, 2022). Simultaneously, as people spent more time at home, studies also noted an increase in online gambling by 11–20% (Hodgins and Stevens, 2021; Price, 2022). One study found that COVID-19 and the stocks of certain online gambling and gaming companies showed strong, persistent, and positive long-run relationships, suggesting that these activities were gaining popularity during the pandemic (Daglis, 2022).
3.2.3 Risk factors of problem gambling during COVID-19
Studies have identified possible risk factors for problem gambling behavior during the COVID-19 period, such as demographics, psychological factors, and specific motivations such as boredom and stress relief.
3.2.4 Demographic risk factors
A potential demographic risk factor for problematic online gambling behavior during the COVID-19 period was being of a younger age group. Studies suggest that being in the 18–25 years old age group was associated with increased problematic internet use, which includes gambling among other virtual activities such as gaming and social media use. Increased freedom from parental control and easier access to online applications were possible enabling factors for online gambling (Islam et al., 2020; Price, 2022). With more educational and occupational work shifting to the virtual landscape, young adults facing challenges adjusting to new lifestyles might have been more susceptible to online gambling during the pandemic (Islam et al., 2020).
3.2.5 Psychological risk factors
Psychological factors such as loneliness, depression, and anxiety were postulated as risk factors for increased gambling to relieve stress during the pandemic (Islam et al., 2020). One study suggested that predictive factors of gambling included anxiety, depression, reduced working hours, and those with a previous history of online gambling. Those screened for moderate and severe forms of anxiety (25.7%) and depression (12.6%) were more likely to participate in online gambling during the earlier period of the pandemic (Price, 2022). Previous studies have also established an association between anxiety or depression and problematic gambling behaviors (Barrault et al., 2017; el-Guebaly et al., 2006).
3.2.6 Motivational risk factors
Common motivations for those who participated in gambling during the COVID-19 pandemic include boredom, stress relief, and leisure. Among those with increased gambling behavior, boredom was identified as one of the more common motives, along with a need for relaxation (25%) and stress relief (15%) (Hodgins and Stevens, 2021). This was not surprising, given that many countries were going into lockdown during the pandemic, giving individuals more leisure time at home to participate in gambling activities.
3.3 Associations between pathological gambling and excessive trading
Having established the increased patterns of trading and gambling behaviors during the COVID-19 pandemic, the relationship, similarities, and differences between excessive trading and gambling disorders is explored in this section. Specifically, both excessive trading and problematic gambling share core behavioral features, including the tendency to chase losses, act on emotional impulses, and persist in the behavior despite adverse consequences (Grall-Bronnec et al., 2017; Marković et al., 2012). These behaviors are often reinforced by psychological mechanisms such as intermittent rewards, heightened excitement, and the illusion of control (Golin, 2001; Grall-Bronnec et al., 2017). Table 3 summarizes the papers exploring the relationships between gambling and trading.
Table 3. Summary of articles on trading and gambling.
3.3.1 Similarities between gambling disorders and excessive trading
Excessive trading and gambling disorders appear to have a positive relationship (Arthur and Delfabbro, 2017; Grall-Bronnec et al., 2017; Marković et al., 2012; Mills and Nower, 2019; Youn et al., 2016). Trading behaviors were found to be associated with increased frequencies, risk, and severity of problem gambling. A study on cryptocurrency trading found that trading and other gambling activities were positively correlated (Mills and Nower, 2019). Gamblers who engaged in trading with both cryptocurrencies and high-risk stocks experienced higher problem gambling than those who engaged in only one form of trading. This has led some financial market investors to seek help for gambling disorders, despite trading being an economic activity for most (Youn et al., 2016). Another study on day trading found that 90.8% of day traders also participated in traditional forms of gambling, which was significantly higher than the general adult population (Arthur and Delfabbro, 2017). This led to a higher prevalence of problem gambling in the day traders as compared to the non-day traders, which could have been attributed to various factors, including increased opportunities for and ease of access to investment and trading (Marković et al., 2012).
Similarly, engagement in gambling behaviors was also associated with increased frequency, risks, and severity of excessive trading. A year-long study found that more than half of regular gamblers were involved in trading cryptocurrency currencies, and those at moderate- and high-risk for problem gambling were more likely to engage in frequent cryptocurrency trading compared to those deemed to be at low or no risk for problem gambling (Mills and Nower, 2019). Notably, those with experience gambling online were observed to have higher rates of cryptocurrency trading compared to those who preferred gambling in physical casinos only. These results can be explained by similarities in the activity profiles of the two behaviors, as well as in the personality profiles and cognitive distortions of those who engage in both activities.
3.3.2 Activity profiles of pathological gambling and excessive trading
The acts of trading and gambling were found to have a considerable overlap in activity profile and structural characteristics (Grall-Bronnec et al., 2017). The view that casino gambling and certain areas of the stock market being essentially one and the same is shared by many, where stock market investment is perceived as a more “socially acceptable” form of gambling (Oliveira and Silva, 2000). Structurally, trading activities also possess the same four components in both traditional and online gambling: “money betting, irreversible betting, a binary win or lose outcome, which depends entirely or partly on chance” (Grall-Bronnec et al., 2017; McCormack and Griffiths, 2013).
Traders and gamblers also demonstrated similarity in the process of developing addictions to their respective activities. Excessive traders initially experienced small wins, following which there was a chasing of losses, and eventually leading to a loss of control. These addictive behaviors identified in the traders allowed them to be characterized as having a gambling disorder (Grall-Bronnec et al., 2017). Of note, traders seemed to have a higher propensity to take part in skill-based forms of gambling as compared to chance-based formats (Arthur and Delfabbro, 2017; Grall-Bronnec et al., 2017).
3.3.3 Personality profiles of pathological gamblers and excessive traders
Studies have found that the personality profiles of some traders and those active in the financial market were similar to those of pathological gamblers (Marković et al., 2012). Sensation-seeking, a personality trait that was common in excessive traders (Grall-Bronnec et al., 2017), had been highlighted by researchers as a key trait in gamblers as well (Golin, 2001; Powell et al., 1999; Wong and Carducci, 1991). Studies have shown that many gamblers partake in such activities for excitement and found similar sentiments in stock traders engaging in trading (Dorn and Sengmueller, 2009; Dorn et al., 2008; Gao and Lin, 2015). Risk-taking was also observed in traders who invested in very high-risk-level stocks with extreme returns (Arthur and Delfabbro, 2017), another personality trait that was found in gamblers as well (Golin, 2001; Powell et al., 1999; Wong and Carducci, 1991). Other studies have found that higher self-reported risk-accepting attitudes were also associated with both excessive stock trading (Markiewicz and Weber, 2013) and excessive gambling (Mishra et al., 2010). Other notable personality traits common to those who participated in gambling and stock investing included having “material needs, competitiveness, superstition, financial conservatism, and numeracy” (Grall-Bronnec et al., 2017; Jadlow and Mowen, 2010).
Persistent loss-chasing, concealing gambling activities, and wagering in response to emotional distress are common behaviors among individuals with gambling disorders (American Psychiatric Association, 2013; Grall-Bronnec et al., 2017). These behaviors are frequently accompanied by underlying psychopathologies, including impulsivity, anxiety, and depression, which may both predispose individuals to wager and be exacerbated by it (Barrault et al., 2017; Dowling et al., 2015).
3.3.4 Cognitive distortions in pathological gambling and excessive trading
Cognitive biases, most significantly the illusion of control, have been observed in both pathological gamblers and excessive traders (Golin, 2001). The illusion of control leads gamblers and traders to think that they have developed strong expertise in their respective fields, resulting in overconfidence and the misconception that all decisions made by them were correct, encouraging them to take unnecessary risks (Grall-Bronnec et al., 2017). Other cognitive distortions found to be common in gamblers and traders included “selective memory, gambler fallacy, and rationalization” (Turner, 2011).
3.3.5 Diagnostic classification for gambling disorders
In the DSM-IV-TR, pathological gambling is described as an impulse control disorder (American Psychiatric Association, 2000) with significant overlaps with psychoactive substance addiction in terms of its biological processes and manifestations of signs and symptoms. Subsequently, in the DSM-V, pathological gambling has since been termed as gambling disorders reclassified under substance-related and addictive disorders (American Psychiatric Association, 2013).
3.3.6 Diagnosability of excessive trading
Many researchers believe that the diagnostic criteria for gambling disorders and addiction can also be applied to excessive trading (Grall-Bronnec et al., 2017; Marković et al., 2012; Youn et al., 2016). Notably, one study developed a new scale, known as the Stock Addiction Inventory, to specifically identify gambling addicts in financial markets, with components adapted from the DSM-V diagnostic criteria (Youn et al., 2016).
The DSM-5 specifies nine criteria for Gambling Disorder, which include: (1) preoccupation with gambling, (2) increasing amounts of money required to achieve excitement (tolerance), (3) repeated unsuccessful attempts to control or stop gambling, (4) restlessness or irritability when attempting to reduce (withdrawal), (5) gambling as a means of escaping problems or alleviating dysphoric mood, (6) chasing losses, (7) lying to conceal involvement, (8) jeopardizing relationships or opportunities, and (2009) relying on others for financial rescue (American Psychiatric Association, 2013). However, these diagnostic criteria are also increasingly acknowledged as applicable to excessive trading behaviors. Research indicates that individuals who engage in excessive trading frequently demonstrate symptoms that are similar to those of gambling disorder, including preoccupation with trading, tolerance, concealment of behavior, and continued engagement despite harm (Grall-Bronnec et al., 2017; Youn et al., 2016; Marković et al., 2012).
When applied to trading, studies have found that majority of the excessive traders met the diagnostic criteria for addictive disorders, including the presence of craving and tolerance behavior, withdrawal symptoms, and negative impact on their daily activities (Marković et al., 2012), as well as gambling disorders, including having a preoccupation with trading, concealment of activities, and inability to control or reduce their trading activity (Grall-Bronnec et al., 2017).
4 Discussion
The COVID-19 pandemic’s psychosocial impact likely played a significant role in the exacerbation of both excessive trading and problem gambling behaviors. Economic uncertainty and employment insecurity introduced significant financial pressures, while lockdowns and social distancing measures contributed to increased feelings of isolation, boredom, and stress (Brooks et al., 2020; Islam et al., 2020). These factors may have motivated individuals to pursue emotional escape or a sense of control through speculative financial activities and wagering. Exposure and engagement were further enhanced, notably among younger and psychologically vulnerable populations, as a result of the increase in digital platform usage during this period, which was attributed to increased accessibility and time spent at home (Hodgins and Stevens, 2021; Mills and Nower, 2019).
This narrative review explored the effects of the COVID-19 pandemic on stock and cryptocurrency trading and problem gambling behavior by first examining the relationship between COVID-19 and trading behavior among investors. Next, the effect of COVID-19 on problem gambling activity was summarized. Finally, this review examined the association between trading and problem gambling. We will highlight gaps in the existing literature on trading activity and problem gambling behavior during the COVID-19 pandemic, as well as provide directions for further research.
4.1 Effects of COVID-19 pandemic on trading
The effect of the COVID-19 pandemic on investment behavior was multi-fold. This review examined how various factors impacted investor sentiments and psychology during the COVID-19 pandemic. We also examined the effects of the pandemic on trading, including the opening of new brokerage accounts, trading volume, risk tolerance, and herding behavior. The trading behavior adopted by certain groups of investors during the pandemic was worrying as it may potentially mirror the behavior of problem gambling, which is a recognized psychiatric diagnosis.
4.2 Future research and recommendations on trading
Particular attention should be paid to investors who are more prone to making risky investment decisions and engage in more trading (i.e., males, younger investors, investors with lower incomes, orphans, and investors with personality traits such as higher neuroticism, lower extraversion, higher openness, higher agreeableness, and lower conscientiousness). Early identification of these high-risk groups can allow family, friends, medical professionals, and the government to intervene before their investment behavior progresses into problem gambling.
As online trading platforms gain popularity among the younger generations of inexperienced traders, this deserves attention from various stakeholders. This is especially since unregulated and risky trading behaviors can eventually evolve into a problem at both a personal and societal level, similar to problem gambling. Future research should follow up on young, inexperienced traders who started investing during the COVID-19 pandemic to determine if they display excessive trading or risky trading behaviors in the long run.
Herding behavior was prominent in various countries and industries during the COVID-19 pandemic. Financial literacy should be promoted, and regulations should be put in place to prevent risky trading behaviors in these vulnerable groups of investors. The government and other relevant authorities could take appropriate steps (for example, by setting regulations and rolling out monetary policies) to reduce uncertainty and mitigate baseless herding behaviors. Further research could be done to follow up on the herding behavior seen in the various markets discussed, to determine if such behavior persists, improves, or worsens post-pandemic.
4.3 Effects of COVID-19 pandemic on gambling
The COVID-19 pandemic had not only changed the behavior of investors worldwide but also that of gamblers. The trends in the mode, prevalence, and predisposing factors of gambling behavior since the emergence of the COVID-19 pandemic were explored. New restrictions in movement have changed the way people participate in gambling activities, with gamblers shifting their betting activities from physical venues to online platforms. While online gambling itself may not predispose individuals to gambling addiction disorder, the use of internet gambling among highly engaged gamblers can contribute to gambling problems. Hence, further research of this mode of gambling can be useful to inform the development of preventative measures and better regulation of online gambling activities.
This paper also identified a heterogeneous response in individual gambling behavior, with fewer people participating in gambling activities in general, but a specific minority exhibiting potentially problematic gambling behaviors. Factors associated with greater problematic gambling activities had been explored, such as being in the 18–25-year-old age group, along with psychological factors such as loneliness, depression, and anxiety, and motivations for stress relief and boredom. With more young adults at risk of problematic gambling during the COVID-19 pandemic, strategies to address this issue could adapt to target this demographic group. Future research can focus on evaluating psychological and behavioral treatments specifically for individuals who participate in gambling due to psychological reasons, as well as to identify other relevant risk factors for pathological gambling amidst the pandemic.
Of note, those who increase their gambling activities during the COVID-19 period may be more susceptible to gambling disorders in the future. One study suggested that 48% of people who increased their gambling during the lockdown period either maintained or further increased such activities after the relaxation of restrictions. Further studies can explore if there is an association between gambling activities during financial uncertainty and subsequent gambling behavior beyond times of crisis.
4.4 Harmful consequences of excessive trading and gambling disorders
Excessive trading and pathological gambling can be seen as two sides of the same coin.
Traders that engage in excessive trading often fulfill the criteria for gambling disorders in the DSM; likewise, those at risk of problem gambling are also more likely to engage in excessive trading. Both groups share several similarities in personality traits and cognitive distortions, as well as other characteristics.
This is significant given the possible negative sequelae arising from the two activities. Excessive trading is associated with comorbid psychiatric disorders such as depression and anxiety. Gamblers are also at risk of these psychiatric disorders, with three-quarters of the patients in a study suffering from major depression and a quarter from anxiety. This is supported by other studies which found that comorbid psychiatric disorders were common in those with gambling disorders. Gamblers who took part in trading of both cryptocurrency and high-risk stocks were shown to have greater depression and anxiety symptoms than those who took part in trading of either cryptocurrency or high-risk stocks, suggesting that an increase in the volume of trading is significant in predicting a greater risk of having these comorbidities. Apart from psychiatric disorders, gambling disorders and excessive trading can lead to a loss in financial and psychosocial functioning and were also found to be associated with substance abuse.
4.5 Limitations
One limitation of this narrative review is its susceptibility to selection and reporting biases, as the data were exclusively drawn from published studies, potentially reflecting selective perspectives while omitting unpublished or non-English sources. Additionally, this review does not fully account for regional variations in the impact of the COVID-19 pandemic on trading and gambling behaviors. While our analysis highlights significant shifts in gambling patterns during the pandemic, we acknowledge that differences in lockdown measures across regions may have allowed offline gambling to persist in certain areas. Moreover, the specific effects of the pandemic on individuals with pre-existing gambling problems, as well as those who had never engaged in gambling before, remain underexplored. Future research should aim to provide a more comprehensive understanding of these dynamics to better inform public health interventions and regulatory frameworks.
4.6 Recommendations
The robust interplay between excessive trading and problem gambling during the COVID-19 pandemic can lead to compounding of the downstream effects that may continue to linger on in the generations to come. This is a cause for concern given the rising prevalence of these activities in the community. Thus, future research should be directed toward early identification of excessive traders, given their increased risk of problem gambling. Future work should also explore if current treatments for pathological gamblers or gambling disorders can be adapted for use in excessive traders, given the similarities in the activities and traits of people who engage in them. It is evident that any future research that seeks to expand upon the results of this analysis should concentrate on the psychological and behavioral causes of excessive or problematic gambling. It has been suggested that the online environment presents a greater risk than other settings, necessitating the implementation of prevention measures that are specifically designed for this environment. Incorporating built-in mechanisms to restrict excessive spending on the platforms and increasing public awareness of the dangers associated with these online platforms are potential solutions. Additionally, authorities may contemplate the approval of harm reduction strategies that are specifically designed for vulnerable populations, such as novice or younger users. It is reasonable to provide recommendations and address these concerns in a more effective manner in order to achieve the objectives outlined in clinical and social contexts.
5 Conclusion
In conclusion, this narrative review sought to explore how excessive trading and risky trading behaviors have become more prominent during the early phase of the COVID-19 pandemic. Our findings were concerning given that excessive trading shares many similar characteristics and implications as problem gambling – which is a well-recognized psychiatric disorder. We propose that excessive trading could indeed be a form of addiction, akin to a type of gambling disorder, which could be potentiated by the changes in the way we live during the early COVID-19 pandemic. Given the potential negative consequences of excessive trading for individuals (including functional impairment) and larger communities, excessive trading behavior deserves greater attention from the psychiatric community and governments around the world, such that appropriate regulations can be put in place and relevant aid can be promptly provided by relevant authorities.
Author contributions
NL: Conceptualization, Data curation, Formal analysis, Methodology, Writing – original draft, Writing – review & editing. HY: Conceptualization, Data curation, Formal analysis, Methodology, Writing – original draft, Writing – review & editing. CS: Conceptualization, Data curation, Formal analysis, Methodology, Writing – original draft, Writing – review & editing. JK: Conceptualization, Data curation, Formal analysis, Methodology, Writing – original draft, Writing – review & editing. V-LT-C: Writing – review & editing. CH: Writing – review & editing. TC: Conceptualization, Data curation, Formal analysis, Methodology, Project administration, Writing – original draft, Writing – review & editing.
Funding
The author(s) declare that no financial support was received for the research and/or publication of this article.
Conflict of interest
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
The author(s) declared that they were an editorial board member of Frontiers, at the time of submission. This had no impact on the peer review process and the final decision.
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The author(s) declare that no Gen AI was used in the creation of this manuscript.
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Keywords: trading, gambling, addictive behavior, impulse control disorders, cryptocurrency
Citation: Lyn NLW, Yeo HY, Startup CC, Koh JMY, Tran-Chi V-L, Ho CSH and Chee TT (2025) Stock and cryptocurrency trading and problem gambling behavior during early phases of the COVID-19 pandemic: a narrative literature review. Front. Psychol. 16:1585094. doi: 10.3389/fpsyg.2025.1585094
Edited by:
Cody Ding, University of Missouri–St. Louis, United StatesReviewed by:
Zihniye Okray, European University of Lefka, TürkiyeShihua Huang, Shenyang Agricultural University, China
Copyright © 2025 Lyn, Yeo, Startup, Koh, Tran-Chi, Ho and Chee. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
*Correspondence: Tji Tjian Chee, dGppX3RqaWFuX2NoZWVAbnVocy5lZHUuc2c=; cGNtY3R0QG51cy5lZHUuc2c=