[iterati]

Yes, my level of respect for traders is exactly zero. There's a difference between investing and trying to make a profit off short-term trades, arbitrage, and other forms of financial practices that offer dubious value to anyone other than the trader.

[harryh]

When you buy stock as an investor who do you think you're buying it from? A trader.

[kedean]

The respectable case is traders who transfer good between supplier and buyer because there is no smooth transfer path or when there is significant risk in communicating directly with the selling, such as stocks, grocery stores, and realtors. The non-respectable case is when the trader exists purely to hold onto then profit on the product. This includes domain squatters, ticket scalpers, and those people who buy things from one thrift store to sell back to another thrift store at a higher price. It's the same reason why patent trolls are so disliked.

[harryh]

Without ticket scalpers I couldn't decide to go to a sold out show or ballgame at the last minute. They provide a valuable service to me.

[hyperpape]

The standard answer is liquidity, which is a really abstract concept, and one I still struggle to conceptualize (how hft supposedly creates liquidity is still too abstract for me, for instance).

Here is one recent example that was eye-opening to me: http://www.bloombergview.com/articles/2015-07-07/can-you-rea....