Because trading options is a crime

November 29, 2021
by Noriyuki Morimoto

Gambling is a crime. Horse racing is gambling, which is originally deemed a criminal act, but it is specifically legalized under the Horse Racing Law. The rationale for legalization is that the proceeds of horse racing are earmarked for expenditures of a public nature and that horse racing is accepted as a culture.

Options trading is in principle gambling and a crime, but as long as options trading in the financial sector is defined as a business of financial institutions in financial laws and regulations, it is understood that the crime of gambling is not applicable. However, setting aside illegality, whether all acts of options trading are legitimate financial transactions requires some consideration.

In light of the social necessity of the financial function, some option transactions are not justifiable from a social acceptance point of view, and options with extremely high price volatility that are used for nothing more than pure speculation can be regarded as de facto gambling.

In fact, the applicability of gambling charges to certain types of financial options trading has long been, and continues to be, debated.

In order to legalize what is originally a crime, various requirements must be satisfied, such as social necessity, rationality, and cultural background, etc. Financial options trading also requires reflection that always goes back to the starting point that it is originally a crime.


[Category /Art Investment]

Noriyuki Morimoto
Noriyuki Morimoto

Chief Executive Officer, HC Asset Management Co.,Ltd. Noriyuki Morimoto founded HC Asset Management in November 2002. As a pioneer investment consultant in Japan, he established the investment consulting business of Watson Wyatt K.K. (now Willis Towers Watson) in 1990.