[artsrc]

Taking small amounts from very large numbers of other market participants trades, and doing nothing else justifies being removed from the trading arena. I understand that large market participants are starting to do this, setting up 'dark trading pools' where leaches are excluded. Large fund managers also do internal crosses I think to avoid fees, but avoiding leaches might be part of it.

What would justify their earnings would be if they made less money than the humans that preceded them would have.

Two people want to exchange. If a algo trader might quickly hit the seller, then a second later sell at a higher price to a buyer who arrived later, the buyer is worse off in price than if the seller had to wait. The seller gets to sell a second earlier, they probably don't care.

You can't make money unless you are a mint. Traders extract money from the market that would otherwise go to others. They produce no goods that we can consume. There is value to allocating investment funds to useful endeavors. It is not clear that algo's do much of this.

[cynicalkane]

Algos provide liquidity and speed far more efficiently than any other category of traders. And, since they don't market time or trade swings, they can't contribute to bubbles.

You want algos.

[pwnstigator]

Also, algorithmic traders are, by far, the least scummy people on Wall Street. They're in it for the money, they work hard, and generally don't care in the least about power. The real assholes are the ones who are robbing people of their companies, and those people have very little to do with arbitrage.