[nv-vn]

I disagree. Trading may seem zero sum on a short timescale, but over the long term markets (empirically) trend upwards. Thus, simply being invested in diverse indices should yield some positive return in the long run. This makes sense as long as we assume GDP growth over time, which is an assumption that has kinda been baked into government/economics to my understanding.

At a short time scale, yes there tends to be a winner and a loser, but even then it's not so clear cut. Most of the trades happening at a short time scale are institutional rather than retail (i.e. people who have the risk tolerance for this type of trading & who have profited enough from it to keep doing this type of behavior). The activity of most HFT firms is some combination of market making & arbitrage, where the profit can be thought of as a fee for trading for other participants (e.g. Robinhood doesn't charge commission but sells order flow, which tends to be cheaper than commission per trade). In general, price improvement is also possible since these make markets more efficient, so as an example it would not be unusual to see firm A sell to firm B who sells to firm C, where both A & B see a profit from their sales. This is possible because prices across markets are not automatically synced, so A has access to a better price than B who has access to a better price than C. And because institutional trading dwarfs any kind of retail trading, the trades can appear high frequency from the perspective of the HFT firm while only occurring, say, once every six months from the perspective of the retail trader.

[gpsx]

Regarding the short term versus long term, I agree with you here. I meant to differentiate between getting profit by investing, which certainly has a lot of value and is the whole point of capital markets, and from getting profit from fluctuations in the current price not tied to an inherent value of the company, which is where I think you have the winner and loser, even if the trades involve multiple parties. Clearly this is what is being done in high frequency trading.

I can buy the idea of high frequnecy trading serving as market making even if it is not something I can fully appreciate. But it still seems like these high frequency traders (and others invovled in investing based on fluctations) are mainly skimming money from the market without providing value.