What good do daytraders do to society?

It seems that traders buy something, and then sell it to someone else for a profit. At least successful ones do this.

How many other businesses do precisely the same thing?
 
And thereby create a flea market where everything
is consolidated so the masses dont have to waste
their time going to every single little garage sale.
Time is money after all.

We make markets too...no? :D

Also...as in my previous post... MOST professions dont
"produce" anything either, and they dont have any
hangups.

peace

axeman


Quote from stockoptionist:



I partially agree with bungrider, chasinfla and others who maintain the liquidity argument. However, I can't help drawing the following analogy to daytraders:

We put out a garage sale one time and there were people out early in the morning driving trucks to load up junk and then turn around and sell it at the local flea markets. Presumably, you can claim that what they do is to take advantage of inefficiencies in the market and hopefully make a buck or two in the process. But I'm still not quite convinced that they are producing anything substantial to society. Daytraders seem to be like them--in a way, taking advantage of micro-inefficiencies while not producing things of substance. Again, I have nothing personal against daytraders, it's just an issue I want to have a clear stand on. And I'm prepared to further change my mind about this.



stock.
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DO NOT forget to add all the daytrades gone bad and became investments!!!!!!! 95% BAGHOLDERS help keeping the market where it's at. Broker's commissions and margin interest in the billions pumped in the economy :D :D :D :
 
I'm curious if you guys think that tobacco companies, alcohol companies and credit card companies etc. etc. add to society.


Certainly these companies pay taxes and provide good jobs for their employees, but are those good things outweighed by the sins (externalities) they inflict on society?
 
I am now thinking back to the days when I was a floor trader... and the houses I used to card up that were on the other side of the trades... I was taking on a hell of a lot of risk to fill Jim Bob's retirement plan which cleared C. Schwab which gave up to Lehmann Bros. on the floor.

In the scheme of things they got off very cheap. A hell of a lot of risk for one tick when they were looking for ten full points on the trade (320 ticks).

I'm glad I don't see the counterparties anymore over the computer. No doubt I'd have second thoughts about hitting Deutsche Bank on 500 contracts on $100K face/car.
 
Quote from stockoptionist:

What good do daytraders do to society?
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I think that successful speculators take money from society and redistribute it. They are kind of socializing the capital. After all, all they can do with the money they get is to spend it.
 
Quote from luke24.5:

Trading creates money out of thin air . . . .
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Wow. I tried very hard to get to the end of this thread without posting, but this comment stopped me cold. I dunno how y'all can survive as traders without a fundemental understanding of just what money is.

If I needed any proof that the bear has a long ways to go yet, this would be it.
 
Quote from candletrader:

By generating profits for ourselves, we are collectively enriching society through paying taxes, providing a good life for our families, and enabling us to be in a position to be charitable...
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Without stating any sort of moral judgement on either trading or theft, stealing from the rich also does this. In other words, this is not a justification - if that is what you seek.

Oh, and yes when one "washes" the dirty money through a business, one pays taxes.
 
If there were no traders who would you sell your stock to?
Who would you buy it from?
The way it is now, I can sell 10,000 shares of MSFT and absolutely KNOW that I can get rid of it instantaneously at anytime I want Mon to fri during normal business hours without even a hint of doubt that I wouldn't be able to sell it. I pay a comission of a little over $50 with that transaction. That's over $500,000 worth of poduct.

How long would it take you to sell a house worth $500,000? Weeks? Months? Maybe a year or more?

How much certainty do have that you'll even be able to sell that house? Do you have absolute certainty?

How much commission do you pay when you sell that house? Around 10% or $50,000?

Imagine selling your stock and having to pay $50,000 in commission. Ridiculous?
Well that's basically what would end up happening without traders.

The real estate market is a market without traders.

Don't tell me traders are just gamblers that don't contribute to society. Just because you don't see a product and can't hold it in your hands doesn't mean you don't produce anything.
 
day traders help feed the capitlistic engine that sustains democracy. Greed + risk + opportunity = economic Darwinism.
 
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