While day trading is not as precisely definable as, say, blackjack or video poker, there is sufficient consensus among various students of the phenomenon to come up with a working definition. Such activity requires the purchase of very large blocks of stock since the arbitrage represents a very small range of value, generally only a few pennies per share. Day trading is an extremely high-risk activity, and just as proponents tout it as a quick way to get rich, it also can lead to huge losses. The authoritative Diagnostic and Statistical Manual of Mental Disorders, Edition IV, provides criteria for diagnosing the condition of pathological gambling, a condition in which persons are addicted to gambling in any of its various forms. Pathological gambling is grouped under the general designation of impulse-control disorders.
Loss of control is a major feature of all addictions.
The Securities and Exchange Commission's study of the activity notes that day trading is an extremely stressful and expensive full time job. Day traders must watch the market continuously during the day at their computer terminals. Just as alcohol fuels the alcoholic's chemically-induced high, money is the pathological gambler's means to euphoria, and just as the drug addict needs more and more of the drug to maintain his high, so the online gambling addict seeks greater and greater amounts of money with which to wager. Perhaps the most obvious way in which gambling-addicted day traders show the relationship of these criteria to their behavior is their early referenced use of margin money. Buying on margin is not restricted to day traders, nor does it occur only in day trading.