The gambling problem is absolutely true, but it's difficult to know how to approach it properly, since it's obvious that there's people gambling just as badly on brokerages in the US right now, primarily with options (especially Robinhood).
The gambling problem is absolutely true, but it's difficult to know how to approach it properly, since it's obvious that there's people gambling just as badly on brokerages in the US right now, primarily with options (especially Robinhood).
But I don't disagree that the there are much larger and more relevant gambling-in-the-guise-of-investing targets.
Also to be clear: I think there are legitimate investment uses of that product-- e.g. if you have a credible reason to believe the Bitcoin price will drop soon you could short a small amount with leverage while keeping the bulk of your holdings safe in cold storage. The extra fees and specific risks of the CFD may be offset by avoiding a need to touch cold coins. But I do also doubt that most users are using it that way.
Buying a three (?) month call which is out of the money by 4.8% is "medium risk" ?!?.
Too bad there isn't a date on that image so I can figure out what the black scholes probability of expiring worthless they consider 'medium risk' is exactly. -- Assuming it's 90 days, they consider a 63% probability of total loss "medium risk".
I'm not really sure where I'd draw the line but anything where my best model said total loss was more likely than not is certainly past the high risk line.
And high risk investments can be totally fine, treated as such. Presumably most users won't go broke losing one contract worth though it might hurt some (I'm assuming that isn't a mini option or some kind of split contract-- so we're talking about a $788 loss for one contract if it expires worthless). But if they call it "medium risk" I'm guessing people are going to buy more than one.