[nandemo]

A short answer would be: one of the externalities that traders like the OP provide is lowering transaction costs for other traders such as investors. Compare trading stocks with speculating in real estate: buying a $150k house and selling it later might involve (say) $10k worth of commissions to your real estate agent, while trading fees on a comparable stock transaction are usually much lower.

Please see my other comment below and (especially) the linked article.

http://news.ycombinator.com/item?id=1467171

Another positive externality of trading is lowering the cost of funding for enterprises. Companies go through a lot of trouble to make an IPO; they do so because getting listed increases their sources of funding.

A longer answer would probably require a blog post, so that we could discuss whether I'm "cheating" -- after all don't the points above boil down to providing liquidity? Am I really "cheating" or maybe your condition is unreasonable? Et cetera. If I write such a post I'll post it to HN, though I doubt I could do better than Larry Harris.