The stock market’s wild ride has left some traders turning to rehab centers

  • There has been an increase in the number of retail investors visiting gambling processing centers.
  • Treatment can be limited, as clinicians often don’t understand the disease or the stock market.
  • This discouraged some addicted traders – and sometimes pushed them back 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 around seven hours a day, starting at dawn and ending in the mid-afternoon, usually too exhausted from the roller coaster of wins and losses to spend time with anyone.

Then, last February, it hit a breaking point. Widmann says he traded same-day expiration contracts and ended up losing almost his entire portfolio — around $30,000 in savings, split between shares of Nvidia, Tesla and other popular stocks to retail traders.

“I was a mess. I was just in tears 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’s part of a larger wave of retail traders who developed a problem similar to gambling addiction during the two-year run of the rat race. pandemic market.

But the help is expensive, limited, and often led by clinicians who themselves don’t know much about the stock market. This leaves some addicted traders feeling discouraged – and sometimes dipping back into the stock market after the treatment.

Help can be hard to find

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

Experts say the lack of classification is one of the biggest hurdles for retail traders like Widmann seeking help. With no criteria specific to their condition, they turn to gambling addiction treatment centers, which have seen an influx of day traders.

“I watch [day trading] like gambling,” Dr. Timothy Fong, co-director of UCLA’s Gambling Studies program, told Insider. finance. So for insurance purposes, I’m letting you know, I’m presenting this as a diagnosis of gambling disorder. ‘Because there’s no financial business mess, right? We don’t have that at all.”

A spokesperson for Gamblers’ Anonymous New York told Insider that the organization has seen about a 15% increase in the past year from day traders calling for help, and over the past two years, Fong estimates his program at UCLA has seen a six-fold increase in the number of day traders calling, from five a month to about one a day.

For those who seek it, help does not 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 between $5,000 and $45,000, according to Algamus founder Rick Benson, and most insurers refuse to cover treatment if gambling disorder is the primary diagnosis.

In addition to costs, Fong thinks there are limits to how well gambling processing centers could help day traders, as these programs are not specialized for people addicted to the stock market.

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

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

“A lot of times when I ask patients, I don’t understand what they’re exchanging. I don’t understand the mechanism by which 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 precisely what was going on with me,” he said. “They understood, ‘Okay, you have financial depression, you’re like having some kind of mandatory behavior’, but I don’t think they understood the complex nature of [retail trading]to be involved in something that professionals engage with and that 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 but mutual understanding of the ups and downs of investing. Widmann believes this is part of the problem and recalled the pressure to trade created by these forums and the thrill of being in a Discord chat with other traders communicating in real time.

“It’s become so mandatory because… you’re part of this group of people and you want to be part of what they’re doing.”

Dive back into

Even now, Widmann isn’t sure he’s out for good.

“It definitely crossed my mind where it’s like I get a pretty big position, maybe I’ll try my hand at it again. So I can’t say that’s a hard no. ” said Widmann.

This desire to dive back into the market even after processing poses one of the biggest challenges for vendors in the field, Fong said, and Algamus’ Benson added that it’s one of the key differences between the day traders and gamblers.

“[A day trader] can live under the illusion that it is just investing,” Benson said.

He says one of the clinic’s biggest challenges is convincing traders they weren’t “professional investors,” Benson said, and showing patients that their “bad year for investing” is actually something pathological. It involves a mix of play education, individual therapy and group therapy, which he says is particularly important.

“The players are tremendous liars and bullshit. While in group therapy, the group works against that,” Benson said.

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

“They’re keen on getting the money back and they think it’s just a temporary pit stop,” he told Insider. “So I try to talk to them as an advisor and as a friend. I care about you and that’s why I’m giving you this tough advice: you have to sit with these losses for now,” says he to his patients.

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